The rabbit chairman/tuzhuxi 20251011
"Friends come with good wine, if the wolf comes to meet it with a hunting gun."
directory
1. Sino-US trade war from truce to "escalation"
2. China's countermeasures
3. Since the Madrid negotiations in September, the US government has made various "small moves" against China.
4. Why did China react so much?
Analysis of the United States: Why did the Trump administration take these small steps in recent weeks?
6. Analysis of the realistic scenario of the Trump administration's China policy.
VII. further analysis
8. China's countermeasures: helping to establish "conditioned reflex"
9. Deduction for the next step
10. The AI bubble in the United States: the "powder keg" of finance and economy
1. The Sino-US trade war has gone from truce to "escalation"
Some time ago, people felt that Sino-US relations had stabilized, there had been a breakthrough in negotiations on the TikTok case, and a leadership summit was also in the making. But overnight, the Sino-US trade war seemed to have resumed, returning to the familiar scene. Trump posted a long post on Truth Social, announcing that the United States will impose 100% tariffs on all China products, effective November 1, and will also restrict exports of all key software to China as "retaliation" for China's rare earth restrictions. Trump also said angrily in his post: "What remains is history," meaning that China deserved it. U.S. stocks fell sharply immediately, and Hong Kong stocks and A shares were also affected today. Of course, as of now, the market's response has been rational and restrained-after previous rounds, people have had enough experience: this is likely to be another wolf.
2. China's countermeasures
What annoys Trump the most? It is China's rare earth counter-measure against the United States. In fact, after the National Day, China introduced two major countermeasures against the United States, including: 1) Rare earth export control:On October 9, China introduced new restrictions on rare earth and related technology exports as a direct response to the update of the U.S. entity list, which covers key rare earth elements (such as uranium, uranium, etc.) and has a significant impact on U.S. semiconductors, electric vehicles, high-tech and defense industries. 2) Shipping countermeasures:On October 8, China amended the Maritime Law to pave the legal way for countering U.S. port charges; On October 10, China announced reciprocal countermeasures and imposed special port fees on American ships starting from October 14; 3) Qualcomm:On October 10, the State Administration for Market Regulation issued an announcement that Qualcomm was suspected of violating the Anti-Monopoly Law of the People's Republic of China because it acquired Autotalks, an Israeli automotive chip design company, and launched an investigation into Qualcomm in accordance with the law.
Of course, what really touched Trump's nerves was China's expansion and upgrading of rare earth export controls. As the author said before, this move by China is a "big killer" and has a "acupuncture" effect on the United States. It is a real "stuck neck." The United States has become accustomed to various "weaponized" methods such as long-arm jurisdiction, sanctions and suppression, and export controls against China (and countries around the world). It has been taken for granted that China can still constitute a countermeasure against the United States. (Refer to "Trump’s “Chaos” and China’s “Punk Hole”》）。 Combined with industrial and institutional analysis, it can actually be seen that with the current system and model of the United States, it will be even more difficult to replicate a rare earth industry chain outside China in the short to medium term than China's breakthrough in the AI-semiconductor technology ecosystem (that is, Breaking the technical barriers of Nvidia-TSMC-ASML).
The characteristic of American hegemony is that it arms everything; it has long taken bullying other countries for granted, and even considered it to be reasonably legitimate, moral and noble. He is only allowed to do it himself, not allowing others to return. Others dare to return, he is not only shocked, angry, but also feeling “insulted” (Trump called the Chinese counter-conflict a “moral insult” to the United States).
So, first of all, we should look at what the United States has done to China in the past few weeks.
3. Since the Madrid negotiations in September, the U.S. government has made various "small moves" against China
Following the mid-September Madrid trade round negotiations, the Trump administration introduced a new set of trade restrictions against China, including an expansion of entity lists, shipping charges, airlines, and Chinese companies to buy Iranian oil, in violation of the "stand-up" promise, exacerbating trade friction.
1. Expansion of the coverage of technology export controls
1) Entity list:The U.S. Department of Commerce (BIS) has repeatedly updated the list of entities, adding several Chinese entities to restrict their access to U.S. technology, products and services, mainly aimed at drones, intelligent technology and civilian dual-use enterprises, in particular, on September 12, BIS announced 32 new entities, 23 of which are located in China (in effect on the same day); on September 16, further revised the list of entities, adding 11 entities in China.
2) 50% control of equity rules”On September 29, 2025, the BIS issued a rule to extend the “entity list” control to 50% of the enterprises that had previously held entity shares, which is to limit enterprises to penetrate, as long as the shareholders of the enterprise directly or indirectly own 50% or more of the shares of the limited entity, will be automatically included in the technical export control measures – even if these subsidiaries are not directly included in the entity list. This greatly broadened the scope of control, because the US export system is “point-name” enterprises are not strictly restricted, now 50% of the new regulation is “share penetration”, is the great expansion of the scope of regulation, and is definitely aimed at Chinese enterprises; 3) the “red flag” rule: BIS requires that if the expor
2. Charging Chinese ships: The Office of the United States Trade Representative (USTR) imposes special port service fees on ships built or operated in China, aiming to reduce dependence on Chinese shipbuilding industry and protect domestic industries in the United States. The fee will be gradually increased, starting with a charge of $50 per net ton. To $80 in 2026, $110 in 2027, and $140 in 2028); Chinese-built ships are charged at the higher of US $18 per net tonne or US $120 per container (increased to US $33 and US $250 respectively in 2028); A charge of $14 per net ton is charged for non-US-built car carriers (ro-ro). The policy was announced on or about October 7, effective October 14, 2025 (first phase rates).
3. Policy on China's purchase of Iranian oil. On October 9, the U.S. Treasury Department imposed sanctions on China's independent refineries ("Teapot Refinery") and related oil terminals. About 100 natural persons, entities and ships were included, including Shandong Jincheng Petrochemical Group, and China Rizhao Shihua crude oil, which operates a terminal in Lanshan Port, was sanctioned. The sanctions involve freezing its assets in the United States, prohibiting Americans from trading with it, and restricting U.S. dollar financing. The US move aims to cut off the circulation of Iranian oil through the China market. This is the fourth round of U.S. sanctions against Iran's oil trade this year.
4. Policy for airlines: The U.S. Department of Transportation (DOT) proposed on October 9 to ban China airlines from flying over Russian airspace on China-US routes, citing the fact that China airlines used Russian airspace to gain "unfair" advantages (such as shortened flight times and fuel consumption). If the proposal finally comes into effect, the ban will take effect as soon as November and will force China airlines to divert, greatly increasing operating costs.
4. Why did China react so strongly
The Madrid economic and trade negotiations were held from September 14th to 15th. In this round of negotiations, TikTok was regarded as an important topic, and China also took a pragmatic, positive and constructive attitude to solve the problem with the United States and took practical steps. The heads of state of China and the United States had a telephone conversation on September 19th. The general direction is to build trust, increase consensus, ease differences, maintain relations and strive to properly handle bilateral relations through more consultation mechanisms. China clearly stated that the United States should avoid taking unilateral trade restrictions next, so as to prevent undermining the achievements made by the two sides through several rounds of consultations. It should be said that this is the basic consensus and direction reached by the two heads of state, and it is also a prerequisite for the advancement of Sino-US relations. This round of dialogue has also created conditions for the two heads of state to hold more rounds of summits in the future.
From China's perspective, Sino-US relations are the most important bilateral relations in the world, and they are also the stabilizer, ballast stone and propeller of the international community and geopolitical and economic security. The entire international community wants to see the two superpowers manage their relations well. China also hopes to make efforts to this end. However, considering the anti-China consensus established by American political circles over the years, it is not so much about developing and promoting relations as about managing and maintaining relations: we don't expect Sino-US relations to get better immediately, but we can't let them continue to deteriorate. Try to avoid the escalation of conflicts. For China, a realistic recognition is that what we need most at the moment is a good international development environment and continue to do our own thing well.
However, these measures taken by the United States to contain China all occurred after the Madrid negotiations-the two sides had a good talk, but the United States made various small moves and unilaterally proposed a bunch of sanctions. This is a betrayal of negotiations, a great disrespect for China, and a so-called "moral insult." Of course, China must counter this.
It is called “talk, open the door, knock, go to the end.”
Analysis of the United States: Why did the Trump administration take these small steps in recent weeks?
Why did the two sides talk well, and the relationship suddenly seemed to "go straight"?
First, look at the overall direction and consensus of the U.S. strategy towards China.
Consensus on China (anti-China consensus)Regarding China as the main challenge and threat to the United States, believing that the United States needs to strategically contain China, reduce its dependence on China, and strategically decouple from China (especially in so-called "sensitive" areas involving technology and security) is the overall consensus of the Trump administration team, the political circles of both parties in the United States, and the American society on China. These consensuses have been formed in the past decade or so, and have been basically recognized and accepted by Washington technocrats, aides, expert think tanks and decision-making elites. The first Trump administration played a big role in building this consensus (the trade war with China), and the Biden administration continued and escalated it (the technological war with China). (For details, refer toThe five major consensus of the United States on China, and the "non-consensus" part》 ）
2. Secondly, see whether the new policies introduced by the United States since September are in line with the above-mentioned consensus on China.
The answer is yes:
1)"Entity List" and technology export control:The game of China-America is ultimately scientific and technological competition; American decision makers believe that in order to keep the U.S. technology ahead, on the one hand to promote the development of the U.S. itself, on the other hand, also to increase the constraint on Chinese entities.
2) Increase in fees for China shipsThe policy aims to reduce reliance on Chinese ships (strategically disconnected) while supporting the development of U.S. domestic shipbuilding – the Trump administration (including Trump himself) attaches great importance to U.S. shipbuilding, believing that this is closely linked to industrial rejuvenation, supply chain security, defense industry and the creation of manufacturing jobs.
3) Measures against China airlinesThe use of aviation rights as a negotiation code is one of the policy combinations that the United States has put pressure on China at a broader level such as trade, technology, and industrial policy, and is also in line with the overall direction of its policy towards China.
Therefore, although the policies issued by the U.S. Department of Commerce, the Treasury Department, the Office of the Trade Representative, and the Ministry of Transportation do not conform to the spirit of the Madrid negotiations and the first call between China and the United States, they are generally in line with the consistent strategy, concept, ideas and methodology of the United States against China. These policies are part of the U.S. policy consensus and system toward China. They were not formed in a day or two and have strong policy logic and inertia. Unless Trump personally gives explicit instructions, these policies will naturally be introduced when he does nothing and the bureaucracy pushes them step by step.
In fact, if we exclude Trump's personal factors and regard the U.S. government as a rational subject, then the policies it is most likely to promote and implement are, of course, those that have been highly "internalized" and have strong inertia-because these policies have a general consensus, are "politically correct", are correct by default, and get the least resistance.
3. See if Trump himself knows about these China-control policies
First of all, Trump is of course "informed", which means that he may have instructed and agreed to relevant policies. But just saying "informed" is not enough, it depends on whether he is "highly informed" or "low informed".
The so-called "high knowledge",That is, he clearly knows the relevant policies: policy intention, policy design, policy content and policy results. Moreover, he personally involved, thought, deployed, and discussed.
The so-called low awareness.That is to say, he may have signed the relevant policy, but the policy was buried in a briefing, or in a larger policy package. He did not have a clear understanding of the specific content of the policy and the potential implications. The relevant policy was not discussed at the cabinet meeting. In other words, no group of people came to the office and him the interests of the matter, nor did the cabinet minister initiate the matter at the cabinet meeting.
It may even be "unaware",That is, the relevant policies have been settled at the departmental level (Ministry of Commerce, Ministry of Finance...), but they are limited to the level of technocrats ("deep government"). Trump does not know the specific situation.
So, how to determine whether Trump knew about these policies?
In fact, it is simple, and can be analyzed through various “peripheral evidence.”
First, Trump has been very busy recently.The last time he paid attention to China may be the TikTok project. During this time, his energy was occupied by a lot of other things, that is, the hot events people saw in the media. Including but not limited to: 1) the ceasefire in Gaza (and the Nobel Prize Trump cares about), and planning the next trip to the Middle East; 2) Visit the UK in early October; 3) Charlie Kirk Memorial Service and Follow-up; 4) The U.S. federal government is shut down; 5) Deploy troops to many places in the United States (including Chicago); 6) Strike Venezuela; 7) Announce tariffs in areas such as pharmaceuticals, entertainment, wood and furniture; 8) Meet with Canadian Prime Minister Carney; 9) Concerned about Brazil; 10) Advise pregnant women not to take Tylenol (MAHA) during pregnancy. In short, Trump is too busy to even pay attention to China.
Second, see if Trump has recently made a direct assessment of China’s policy. Mainly referring to his Truth Social post, as well as his public speech.
1) Entity list expansion: Trump did not post or speak. This matter is a departmental initiative, and it can be judged that his knowledge may be low, and there is a high probability that he will know indirectly through briefings, without actively promoting them.
2) Ship charges: Trump did not post or speak. This matter is also a department-level move, and his knowledge may be low.
For Chinese airlines:Trump has not posted or spoke about the airspace ban, and the level of awareness may be low.
China to buy Iranian oilThe policy is dominated by the Treasury Department, according to which Trump is concerned with Iran and China, but has not enlarged with its platform or speech, suggesting that he may not understand the details, or just indirectly through the Cabinet (the Treasury Minister), rather than personally pushing.
In contrast, the imposition of 100% counter-tariffs on China and the restriction of exports of critical software are not only well-informed, but should even be promoted by him personally.
6. Analysis of the realistic scenario of the Trump administration's China policy.
The following is a reasonable deduction.
Since the Madrid negotiations and the phone call between the heads of state, the Trump administration has promoted a new "combination punch" of China control policies. There are no more than two possibilities:
Possibility 1:Technical bureaucrats, according to existing policy consensus, framework, strategy and policy inertia, push relevant policies by department to department. Trump is likely to be aware, and also likely to be unaware, but in general, do not pay attention, do not understand the specific situation, do not consider the need to pay attention, because neither know the Chinese reaction that these policies may bring (now he knows).
Possibility 2 :Trump and his cronies (Besent, Lutnik, etc.) made overall arrangements and deployed "top-down" with the purpose of continuing to suppress and contain China and improving their bargaining chips against China before the summit with China. The whole thing is a "big game of chess".
According to our understanding of the characteristics of Trump and his aides, as well as the operating mechanism of the US government, the former one is more likely. This is not direct evidence, but indirect evidence (based on Trump's attitude and behavior pattern towards China in the past; For the various agendas he has recently fallen into; According to his posts and speeches, etc.).
In addition to the previous analysis, Trump hopes to successes, victories, and be able to show it to the world. The Chinese issue is Trump’s least sense of achievement, gain, and happiness. Exactly speaking, there is a great sense of frustration—especially for tariffs and rare earth. For him, the only progress is actually TikTok. In addition, he has no heart on the Chinese issue, but hopes to focus on what can have short-term effects. The ceasefire is the most recent event he has invested in, and he of course also feels fluctuating for the progress he has achieved (which also explains the “spirituality” behind his angry post).
At the same time, Trump is not a person who pays attention to detail and focuses on long-term planning. Therefore, he has never talked about top-level design or top-down overall planning and deployment. On issues that he is not interested in, he often focuses on the big ones and lets go of the small ones. The sanctions tool he knows best is tariffs, which is a new tactic of tariffs. As for other export control restrictions, it is likely that they were suggestions given to him by his aides.
Trump: What else do we have on the Chinese neck?
Report Mr. President: Key Software.
Trump: Then restrict software exports. First, tariffs. 100%。Plus what was that?
Staff: Critical software, Mr. President.
Trump: Yes, the key software.
Therefore, the story may be such that after the Chinese side re-introduced rare-earth countermeasures, he was informed, and summed up various information from a while ago, so decided to adopt escalated countermeasures.
But what he avoided talking about in his long post was a series of petty actions made by various departments of the U.S. federal government since late September-technocrats who MAGA described as "deep government." Of course, they can argue that they are only following the established policy, and it is MAGA's policy!
Further analysis
Some analysts will think that these two sides are in "pre-negotiation", "a big chess", everything is arranged behind. Individuals think that such interpretations are often over-interpreted and too complicated. In fact, it is not so complicated. It is necessary to know that the Trump administration is very chaotic, has a strong "grasshopper" attribute, and policy is characterized by this disagreement and contradiction.
Therefore, the real scenario is highly likely that the Trump administration lacks unified coordination, and technocrats have promoted these policies "from the bottom up", based on the basic framework of the U.S. policy to contain China. They also believe that relevant policies are reported in the process. Yes, the superiors are informed, the procedures are fine, and they have done this before. It is not even ruled out that some high-level officials believe that such policies can be inserted as foreshadowing before the China-US summit, and grasping the timing and rhythm are the core skills of "deep government."
After that, the Sino-US confrontation did escalate-if you, as a technocrat who believes that anti-China is the biggest strategy of the United States, hope that the president will turn his attention back to China, you will be happy to see this result. This is what you planned. This is how the whole history of the Cold War unfolded. This is how the Russia-Ukraine war broke out. And we can reasonably estimate that this is the medium and long-term policy orientation of the United States-this trend is likely to be more obvious in the post-Trump era.
8. China's countermeasures: helping to establish "conditioned reflexes"
If we argue that the U.S. harassment is driven by the bureaucratic system, "from the bottom up" mainly, then the Chinese counteraction is likely to be "from the top down", there is a comprehensive and planned counteraction. And, now it seems, export control (such as targeting rare earth / critical minerals), really needs a whole set of laws, policies, institutions, technical system, needs a whole set of "infrastructure".
China has responded very strongly to the Trump administration's continued harassment since late September. This is my personal understanding. This is actually a kind of "training" for the United States. Here may be some metaphors. One is, how are children afraid of hot things? For example, fire, very hot food, hot objects. You just have to be permed to know. After it was scalded, he became careful when he saw hot things. Then again,"Once bitten by a snake, ten years afraid of ropes." These all require personal experience. Another metaphor is "Pavlov's dog". There was a scientist in Russia named Pavlov. He often shook bells to dogs and fed them food. Over time, as long as the bell rings, the dog will drool. At this time, the "conditioned reflex" is formed.
This is the effect China wants to: Once the United States breathes badly, thinking of harassing China, it will conditionally reflect on the consequences of China's counter-reaction.
At a minimum, let Trump form such an idea – he may find that he still has to control the bureaucratic system, can not let individual department units rush into small moves; can not be dragged down by the technical bureaucrats.
This is the essence of "talk, open the door; fight, and accompany you to the end." As long as you put on a posture of talking, I will talk to you; and as long as you fight, I will immediately fight back. The benefits brought by "talking" and the disadvantages brought by "fighting" are polarized, but they are equally obvious. This is the philosophy of "struggle" and the art of "struggle".
9. Deduction for the next step
If our analysis based on the foregoing is basically accurate, then the next step with high probability is:
Trump spoke to the outside, understood the situation on the inside, and knew that such a move cannot be taken against China.
2. The domestic economy of the United States does not have the conditions to impose 100% tariffs on China at all
It is necessary to know that the two sides already have regular consultation mechanisms, and the negotiations are at a very high level, high frequency, high quality, and there is reason to believe that the conflict should be managed.
4. The previous exchanges, repeated several times, became the prescribed actions of all parties, and expectations were managed through prescribed actions.
My personal view is optimistic. Today,"Sino-US relations, good, are not much better, and bad, are not much worse." Therefore, the relationship between the two sides can be managed well and the risk of further escalation of conflict can be controlled.
China may not be afraid to have too many expectations (or even fantasies) for a comprehensive repair of China-U.S. relations, but this does not prevent China from seriously managing bilateral relations.
But anyone with discerning eyes knows that the United States has almost all the cards it can play, and the United States can't wait to slap all its cards on the table at once. China, on the other hand, has only just begun to play its cards and is not willing to play its cards yet.
But Trump and his team are deeply afraid of China. And I think they will think a lot, a lot.
My personal opinion is that, ultimately, the Trump administration can be managed. Sino-US relations can be managed.
As the Chinese saying goes, "To strike while the iron is hot, you need to be hard". In the end, everything depends on strength. In recent years, China must seize the opportunity and continue to strengthen its strength. There are fewer and fewer things to make the United States "stuck" China's neck. Hold the rice bowl firmly in your own hand.
10. The AI bubble in the United States: the "powder keg" of finance and economy
Here we have to mention the recent U.S. economic prosperity, also known as the “AI boom”, also known as the AI bubble.
1) The American round of “economic prosperity” is basically dependent on AI； A recent analysis by Harvard University economist Jason Furman pointed out that investment in information processing equipment and software currently accounts for 4% of GDP. But 92% of GDP growth in the first half of this year came from this field. Excluding these categories, GDP grew at an annualized rate of just 0.1% in the first half of the year. This shows that AI-related investments contribute almost all economic growth, and this growth model that is highly dependent on a single field contains huge risks. If the AI boom fades, it could send the U.S. economy into recession
2) The AI boom (bubble) has extremely strong (or too strong) capital market attributes, the most intuitive manifestation of this is the rise of the stock market. This bull market is mainly driven by the so-called "Magnificent Seven", with Nvidia performing particularly well. Data shows that the combined market value of these seven companies has accounted for more than 34% of the Standard & Poor's 500 Index. Since ChatGPT was released in late 2022, AI-related stocks have contributed 75% of the S & P 500 's return, 80% of earnings growth, and 90% of capital expenditure growth. Among them, Nvidia's market value soared to a staggering $4.5 trillion, leading the AI-driven index surge. The U.S. stock market has been pushed to its highest valuation level since the Internet bubble, and the market concentration risk here is probably unprecedented in human history.
3) China Impact: On the surface, the AI-driven capital market boom has promoted the overall economic recovery of the United States, but the unsustainability of the AI boom has become increasingly prominent. As early as June 2024, Goldman Sachs warned that generative AI may be just a capital black hole with "huge costs and meager returns"-after burning US$100 billion six months later, large-scale profitable application scenarios have not yet emerged, and the low-cost impact of China's DeepSeek open source model earlier this year exposed the vulnerability of this bubble. Americans may eventually find that they cannot reap all the dividends through monopoly, like in the previous technology/Internet/digital age. In addition to DeepSeek's impact on the generative AI business model, Americans have also seen that if Huawei, SMIC and other technology companies in the mainland of China can break through the technical barriers of the Nvida-TSMC-ASML semiconductor-AI technology ecosystem, it will pose the greatest risk to the AI prosperity in the United States.
4) The irrational prosperity of the stock market brings huge systemic risks, because American household wealth is deeply bound to the stock marketAccording to the Federal Reserve, by 2024, equity assets such as stocks have accounted for 41.6 percent of U.S. household financial assets and up to 32 percent of total household assets.This means that once the stock markets, especially the tech shares severely overestimated by the AI concept, collapse, it will directly impact consumption and investment through the wealth effect, causing a devastating blow to the U.S. economy, which heavily relies on the AI concept.
5) And the current AI investment boom is not only concentrated in the capital market-vigorously building data centers requires debt financing/credit supportMorgan Stanley predicts that by 2028, global data center spending will reach $2.9 trillion, with super-scale enterprise cash flow covering only $1.4 trillion, leaving a huge gap of $1.5 trillion that needs to be supplemented by financial markets. Among them, private credit will need to fill the $80 trillion inside. The systemic risks brought by AI include equity, as well as credit. This situation is unprecedented, and there may never be a technology bubble in the history of the United States that has derived such a large-scale debt cycle – such as Oracle’s $300 billion agreement with OpenAI, which requires massive borrowing interest rates as high as 500%, far beyond Amazon’s 50% and Microsoft’s 30%, which will turn an orderly cash flow competition into a debt
6) More cautiously, the risk of this round of AI investment boom has spread from the equity market to the credit market.To support the computing needs of big-language models, big companies are crazyly building data centers, and behind it are huge amounts of credit financing and credit support. By 2028, the global data center construction will generate a funding gap of up to $1.5 trillion, of which $80 billion will eventually need to rely on the private credit market to fill. Here, the infrastructure bottlenecks such as aging power grids, energy shortages – these all require a lot of capital expenditure, the original, reasonable business logic is: the technology competition is supported by the cash flow of enterprises; and now the U.S. AI competition is driven by the capital market and debt, the corporate cash flow is an imagination, a story. Relying on financial market financing, and intertwined with equity and credit risk, this
7) NVIDIA is currently recognized as the AI-semiconductor industry chain owner, through supplier financing, to create a "money perpetual motion machine"。 The advanced GPU chips produced by Nvidia are the core hardware necessary for all enterprises to train and run large models. Its market share is as high as more than 90%, forming a de facto monopoly. Nvidia not only controls downstream customers through products, but also penetrates its influence into every corner of the industrial chain through equity investment, supplier financing and other methods, building a huge "Nvidia ecosystem". The way of supplier financing is quite similar to that of Cisco, Lucent and Nortel during the Internet bubble-these companies provide loans or guarantees to customers, and the latter then buy back equipment to form a closed loop of funds; And a similar operation by Nvidia pushes this model to the extreme
8) NVIDIA's advanced chip manufacturing capacity is in TaiwanFrom the U.S. geopolitical perspective, NVIDIA’s ecological foundation is extremely fragile, because NVIDIA itself does not manufacture chips, its chip production is entirely dependent on workforce, and almost all of the advanced chips (98-99%) are borne by Taipei, while NVIDIA’s advanced GPU production capacity is almost 100% (about 98-99%) located in Taiwan. Not only is NVIDIA, from AMD, xAI to the U.S. factory that hopes to develop chips, can not bypass Taiwan. Accumulators are the throat of the entire industrial chain. This means that the U.S. proud AI-semiconductor industry chain supports the economic boom of AI, and the final manufacturing link is entirely in Taiwan’s hands. The U.S. has not establ
9) Geopolitical realityThe geopolitical reality is that Taiwan is close to the mainland of China and far from the United States and the entire Pacific Ocean. This, Trump repeatedly mentioned – his realistic awareness of the issue exceeds the entire U.S. establishment, “deep government” and military-industrial complex aggregate. The so-called “blow-out,” once the regional situation is tense, the U.S. will find its “distant water difficult to rescue near fire”, its entire high-tech industry lifeline may be easily cut off, so that the AI bubble in general will face the end of the catastrophe.
This is the biggest risk the United States faces.: There has never been a stock market boom in history so dependent on a highly segmented industry (AI) and so dependent on an individual company (Nvidia) whose core/underlying production capacity is not at home at all, but based on the biggest geopolitical risk point in the minds of Americans. In other words, the entire U.S. economy is a castle built in the air and cannot withstand any external shocks. Once an impact occurs, the chain reaction it will trigger will lead to a complete collapse of the U.S. economy, and this is the biggest risk and the real risk for the United States.
11) Trump's new impetus to maintain Sino-US relations:You can believe that Trump has enough tech right-wing allies around him to tell him this-from his vice president JD Vance, AI and cryptocurrency czar David Sacks, Oracle founder Larry Ellison, Musk, who has broken up but has indirect connections, Peter Thiel, the technology right-wing brain, Mark Andreessen, a famous venture capitalist, to Nvidia Huang Renxun himself. And he and his crony capitalist relationships also have heavy positions in the capital market, knowing what all this means. Therefore, from the perspective of purely practical interests, Trump has the greatest motivation to maintain relations with China, avoid any geopolitical shocks, detonate the AI bubble in one fell swoop, and at the same time ensure that the AI capital carnival can continue, at least covering Trump's term of office. At this time, he will be more concerned about forcing TSMC to invest in the United States, and the U.S. government's stake in Intel (developing local chip manufacturing). In Trump's view, these matters are related to the technological security, economic security, military security and national security of the United States.
It should be noted that this is a relatively new situation, rather than an old one. Trump and his group can’t understand anything, but they definitely understand the capital market, they understand the AI boom and know the US bottleneck. They also know that the higher the U.S. AI boom, the more it is necessary to stabilize the relationship with China. At this time, Taiwan can no longer be a “barrel of gunpowder”, but a “capstone.”
China should see the current situation, manage its relations with the United States, and concentrate on doing its own thing well. As the saying goes,"Forging iron must be hard on your own." In the end, everything depends on strength. The next two or three years are the key among the keys. We must make the United States as few things as possible, and make China's shortcomings and disadvantages as few as possible. To use our "Grassland Ecology Theory", we hope that "elephant" China will grow up quickly.