One phrase is particularly associated with Mao’s diminutive successor. “It doesn’t matter if a cat is black or white,” the memorable dictum goes. “If it catches mice, it’s a good cat”. In other words: it is possible for a socialist society to have a market economy — or a capitalist society to have a planned one. What matters is which social interests are privileged. Understand Deng’s feline-themed refrain, and the thinking behind it, and you grasp how contemporary China permits private firms, and the profit motive, while warding off the worst evils of capitalism. The economic objectives of the Chinese state are determined politically by the Communist Party, rather than reflecting the sectional interests of capital. The planner state isn’t always kind — it’s generally best not to have your fertility policy designed by a missile engineer — but it has dragged China to the top table of geopolitics.

In his own inimitable fashion, Donald Trump recently offered a mirror to Deng’s famous saying. “I respect China, because it’s… a system that, in theory, shouldn’t work,” he told an audience in Miami last week. “But if you look at China, how well they do, how much they produce. I mean, they produce so many cars that they actually have competitions over who can produce the fewest cars.” If Deng’s words were immortalized as the “white cat” formula, perhaps Trump had articulated the less poetic “too many cars” theory. It certainly distills how Chinese firms, often backed by the state, capture huge market share through oversupply. A decade ago, that meant a sudden profusion of solar panels. Today, it’s electric vehicles.

Such an overt admission of the success of the Chinese system, not least by a Republican president, might be unexpected — but it shouldn’t surprise us. Deng re-calibrated the political and economic system of his own country; now, almost half a century later, it increasingly feels as if the United States will have to follow suit. The question is whether, after Trump, it can. While the People’s Republic has a system where the parties can’t change but the policies can, America seems to operate in reverse. The faces, factions and rhetoric constantly evolve — polarization is everywhere, and ever more ferocious — but the underlying economic reality remains the same.

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How liberalism became a joke

By Aaron Bastani

Even before the Iran War, it was clear that the US, and the “political West” more generally, were in relative decline. Their collective high point came at the turn of the millennium, when the OECD countries comprised 80% of nominal global GDP. Today, by contrast, that figure stands at 60%, with economic clout — and, by extension, political power — flowing east. By another measure, indeed, China is already the world’s largest economy, with India and Russia behind the US in second.

Though it might be tempting to point to recent growth across the Pacific, economic expansion in America rests entirely on debt. While it’s true American GDP grew by an extraordinary $9 trillion between 2020 and 2025, the country’s national debt ballooned even more, rising by $11 trillion over the same period. Even at the start of the year, before the assassination of Ayatollah Khamenei, the country’s jobs data, and stubborn deficit, were at odds with Trump’s rhetoric of an economic miracle. As with every Republican president since Reagan, his growth model is familiar: deficit-funded tax cuts while barking about smaller government. The Brookings Institution recently concluded that keeping tax breaks introduced by Trump would mean the country’s debt-to-GDP ratio will rise to more than 200% by the 2050s. Think Japan, just without the fast trains or social cohesion.

But it’s not just that the West is sluggish. China is increasingly competitive as both an industrial juggernaut and a global center for innovation. In the 2000s, when China was allowed to join the World Trade Organization, the assumption had been that, as America de-industrialized, it would move up the commodity chain, leaving the dirty work for poorer, less creative rivals. The avatar for such thinking was the Apple iPhone. While the handset was assembled in Asia, it was designed in California — home to the world’s largest company, and the first to reach a valuation of $1 trillion.

Today, however, China is building its own versions of the iPhone, from Xiaomi to Huawei, while remaining home to almost a third of global manufacturing. Then there is its burgeoning car industry. BYD is now the world’s leading manufacturer of electric vehicles, overtaking Tesla some years ago. Elsewhere, despite being banned from a number of Western markets, Huawei remains the global leader in 5G networks.

China also has a growing advantage in sectors like lithium-ion storage, solar cells and drones. Six of the world’s 10 leading battery producers are Chinese, while the country produces around 90% of all consumer UAVs. And the innovation gap in both fields is only set to grow. Emblematic of that is how BYD presently has more than 100,000 people working on research and development alone.

Finally, there is the country’s remarkable success with renewables. Nine out of every 10 solar panels are made in China. Given almost half of all electricity worldwide is now generated by renewables — with solar being the leading source by far — that means an exporting bonanza. Global solar capacity grew by 511 GW in 2025, and virtually all of that comes via panels made in the Middle Kingdom.

The war in Iran looks set to accelerate all this — not only emphasizing the industrial prowess of the People’s Republic, but underscoring its advantages as a so-called “planner state”, where private enterprise cooperates tightly with the state. Iran’s strategy of leveraging geography to close an economic chokepoint, and catalyzing a global energy crisis, means Beijing is set to be the conflict’s biggest winner.

In the first days of the war, one often encountered claims that attacks on both Iran and Venezuela were part of a new “Great Game”, with Washington hoping to undermine Beijing’s access to cheap fossil fuels. But besides Tehran only ever accounting for 12% of China’s supply, it was always the historic allies of America, not least in Europe and East Asia, that were most vulnerable to a blockade of the Persian Gulf. Pax Americana not only rested upon security guarantees for both regions, but in also ensuring a steady, cheap supply of energy. These assumptions are now imperiled and, with them, the credibility of the US global order.

Beijing prepared for this moment. Not only is China a net exporter of refined oil, but it also possesses a strategic reserve of 1.3 billion barrels of petroleum — enough to meet domestic demand for three months. So, as energy costs rise for competitors overseas, the Chinese state can offer price stability to domestic manufacturers. No less important, Chinese exporters stand to uniquely benefit — not only from domestic energy stability but also, for many sectors, increased demand. For the likes of BYD, CATL, which is a battery manufacturer, and LONGI, which makes solar panels, we are approaching a dream scenario. They’ve committed decades to creating the world’s most efficient renewable products, with highly optimized global supply chains. Until recently that seemed an uncertain bet. Yet in the weeks and months ahead, global demand will be unleashed.

Already, even before the deluge of orders materialized, China’s lithium-ion battery makers had seen their collective market values rise by $70 billion in the opening phase of the war. Last week, meanwhile, Indonesia’s president announced plans to increase solar capacity 10-fold over the next two years, from 11GW to 100GW. “We’ll convert all motorcycles into electric motorcycles,” he added. “All cars, all trucks, all tractors must [also] be electric”. Lee Jae Myung, the president of South Korea, has made similar noises, adding that the need to switch to renewables was so serious he couldn’t sleep.

If such rhetoric is to become reality, it means spending hundreds of billions on Chinese goods. And besides enabling an export bonanza for the country’s cleantech sector, which has benefited from decades of state support, something else highlights the acumen of China’s planner state: almost half of Congolese-mined cobalt will be in the hands of Chinese firms by the end of the decade, with around 70% of refining happening in the People’s Republic. That is important because the mineral is critical for lithium-ion batteries. While Washington waged a host of unnecessary wars in the Middle East, Beijing secured critical minerals for the backbone technology of the mid-21st century. The same is true for graphite and tantalum — the latter being a key metal for capacitors, central to stable wind and solar energy.

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Why China will beat the West

By Wessie du Toit

When it comes to rare earth metals, meanwhile, China boasts a potential chokepoint of its own. The country has larger total deposits of rare earths than any other, a glaring concern for the United States given that its military is reputed to have reserves equivalent to no more than two months’ use. While it is true such minerals can be found outside of China, for instance in Australia, Beijing currently has a near-monopoly on refining and processing them. If it wishes for meaningful technological sovereignty, here is another industry Washington may soon need to start developing. From a military standpoint the importance of these minerals can’t be overstated. Each F-35 fighter jet, for instance, reputedly requires hundreds of kilograms of rare earth metals.

Yet as we’ve already seen, when your political consensus has long rested on the idea that industry is of secondary importance to financial services, technology firms and various forms of rentierism, that is virtually impossible to accomplish. The margin for such businesses can be large, certainly, but as enterprises they lack the scalability favored by US tech capital. If you view effective business through the prism of monopolies, as someone like Peter Thiel does, mining and processing, with its absence of network effects and high labor component, is deeply unattractive.

As NS Lyons wrote last year for UnHerd, the West’s lack of manufacturing capacity is its most glaring defensive weakness. Even now, despite years of fighting in Ukraine, Europe and the US can’t match Moscow’s ability to manufacture artillery shells. If the West is struggling to maintain parity with Russia — whose manufacturing base is nothing like as productive or wide-ranging as China’s — what hope would they have in a protracted conflict with Beijing? In 2025 China produced half a million consumer drones. The prospect of what that could mean in a war economy is staggering. The country’s shipbuilding capacity, meanwhile, is over 200 times greater than that of the United States.

China’s preparedness — a function of its aversion to market fundamentalism — together with the Iran war, now offers a historic opportunity for those advantages to be extended. Its power isn’t the result of a growing military-industrial complex, but the reflection of world-class civilian industries set to seize even more business. As these industries grow further in the months and years ahead, bolstered by Trump and Netanyahu’s war, that provides an even larger industrial base able to pivot in a time of war. The idea, therefore, that rearmament is the route to industrial renewal for Britain, as John Healey and much of the Labour party insist, is refusing to learn not only the major lessons of the last 25 years, but the last month. If a war with China ever came, the People’s Republic would defeat us for the very same reason it currently exploits demand for green technology: it makes stuff. Its defense capacity is built on its industrial base rather than the other way round.

While some have compared the unfolding events in the Persian Gulf to the Suez Crisis, the American-Israeli failure to inflict a decisive defeat on Tehran would more closely resemble the Fall of Singapore for the British Empire. It wouldn’t, in short, be the end of Pax Americana, but the beginning of the end. The erosion of its alliances; the declining confidence in its competence as a hegemon; the diminishing security returns on hosting American bases — all of these matter. But it is in starting a war which will see China’s leadership in industry and technology grow further still that reveals Washington has played its most foolish hand yet.

Quite suddenly, then, the future seems clearer. Energy stability, whether or not Europe uses more of its own limited fossil fuels, means more electrification, more batteries and more storage. In short, it means deploying more of the technologies where China is the unrivaled market leader. And with technology comes influence, with political realities then bound to shift too.

Deng’s second most famous quote concerned China on the global stage: “Hide your strength, bide your time.” With this kind of leadership — in technology, supply chains and, increasingly, moral authority — the time for hiding may now be at an end.

This realignment was most profound in the country that sits at modern Europe’s heart. In the event of the invasion, the stakes for Germany involved not only one unopened pipeline — the already-controversial Nord Stream 2 — but its 50-year commitment to rapprochement with Moscow. Within 72 hours, Chancellor Olaf Scholz promised to send German weapons to Ukraine, establish a €100 billion fund to increase military expenditure, and end energy dependency on Russia by opening the country to sea-borne gas. Since Putin had, Scholz told the German parliament, “demolish[ed] the European security order that had prevailed for almost half a century since the Helsinki Final Act” in 1975, everything had changed. “We are,” Scholz said, “living through a watershed era [eine Zeitenwende] … mean[ing] that the world afterwards will no longer be the same as the world before.”

In part the German chancellor was right. But Scholz’s version of why European history fractured in February 2022 also distorts reality. Self-evidently, the European security order before Russia’s war was nothing like the one that prevailed in the mid-Seventies: six new European states stood in the former western Soviet Union. Having no prior history of peacetime independence, Ukraine’s emergence in 1991 as Europe’s largest territorial state had constituted an extraordinary change.

But the new Ukrainian nation-state was always geopolitically precarious. Since at least 2009, Putin had openly denied the legitimacy of its existence. In the treaties Ukraine signed with Moscow during the Nineties, it ceded Russian military rights in Crimea. Then, in 2014, it lost the Crimean peninsula and entered a war against Russian-backed separatist rebels in the south-east of the country. If Russia’s invasion severed the present from the past, the shock was the scale of suffering Putin was willing to inflict to destroy Ukraine’s viability as an independent state, amplified by the chasm between the size of his initial ambition to seize power in Kyiv and a military mobilisation entirely inadequate to the task.

The unintended consequence for Europe is now clear: the emergence of a largely unified nation-state-in-arms with a pressing claim for EU membership that will prove hard to realise without concurrent Nato entry. Regardless of Ukraine’s prospects for entering either association with any alacrity, Ukraine’s resilience against Russia has rendered Ukrainian nationhood a crucial geopolitical fact. In a 1984 essay, the Czech novelist Milan Kundera wrote that the Ukrainian nation, “one of the great European nations… is slowly disappearing. And this enormous, almost unbelievable event is occurring without the world realising it”. Ukraine’s independence seven years afterwards only partly introduced western Europeans to Ukrainian history. But, by trying to eliminate Ukrainian nationhood, Putin has instead ensured that it has become a permanent feature of Europe with which the EU must grapple.

The post-Cold War EU relied on a measure of German-Russian reconciliation to allow for German reunification even as the eastern European states had only just successfully asserted their nationhood against the Soviet version of the imperial Russian empire. Thereafter, the Holocaust, as an end point for German nationalism and the catastrophic culmination of decades of ethnic division in eastern Europe, became pivotal to the imaginative construction of the idea of European unity. By contrast, in 2022, a state subject to the simultaneous experience of the Holocaust and Soviet mid-20th century terror became an official candidate for EU membership by fighting a defensive war for its territorial national sovereignty.

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Should America be more like Ukraine?

By Mark Lilla

In doing so, it claimed the right to nation-build, including by suppressing minority languages in the public sphere. No aspect of this experience sits easily with the notion of the post-Maastricht EU as a post-national and peace-oriented construction. An EU that admits Ukraine as a war-formed nation-state would necessarily become a different kind of entity, one that could not be rhetorically legitimated without a new narrative about its historical purpose partially grounded in Russia’s existence as a geopolitical opponent. In Berlin and Paris, an EU with such a relationship to Europe’s resource-rich, continental-size neighbour would indeed belong to a Zeitenwende.

The existential question of Europe’s energy supply triggered by Russia’s war also raises profound questions around nationhood across the rest of Europe. As they opposed Russia in ways that jeopardised their immediate energy security, European governments resuscitated the narrative of energy sacrifice once deployed by Jimmy Carter: reduce your energy usage for the greater good. In spring 2022, the Italian prime minister, Mario Draghi, asked: “Do we want to have peace or do you want to have the air conditioning on?”

But the ghost of Carter’s political failure lingered. Palpably fearing a democratic rebellion on energy, European politicians did not ask citizens to endure too much economic pain in the name of any claim to political community — whether that community be the nation, Europe, or a democratic West. Throwing fiscal caution to the wind, European governments subsidised household fuel bills and some, notably the British and French, still faced a wave of strikes. None appeared to show qualms about European companies buying spot-market LNG already contracted to Pakistan. In Italy, Draghi’s government fell in July 2022 after Five-Star withdrew its support, charging that the former ECB president was prioritising Ukraine over reducing energy prices. Tellingly, when the subsequent general election once again saw the party uncompromised by technocratic and grand coalition politics win the largest number of seats — this time the Brothers of Italy — its leader, Giorgia Meloni, was allowed to become prime minister.

By contrast, reducing energy consumption in the name of lowering carbon emissions remained off-limits. Instead, in making a new case for the energy transition, the war emergency encouraged further the idea that economic transformation could recreate the cross-class interest in national manufacturing production lost from the Seventies. Yet the prospects for realising this ambition were much more propitious across the Atlantic. With the Inflation Reduction Act, passed in August 2022, American climate policy near explicitly became a political bulwark against another 2016-style shock where Trump or a Trump-style candidate again won by appealing to the losers of American deindustrialisation. In contrast to its New Deal predecessor, this federal intervention is explicitly racially inclusive in its conception of nationhood. Indeed, for the Biden administration, it is an act of reparation for the restrictive American nationhood of the past as well as an attempt at restoring the New Deal-originating idea of economic nationhood.

Whether by reshoring manufacturing production it can succeed on its own terms is open to question. But the fact that the United States under Democratic Party rule in 2022 entered the same political space European governments had already sought to occupy in 2019 with their Net Zero 2050 commitments now constrains European ambitions. The American move establishes a competitive geopolitical contest between Western countries around using energy change to rebuild nationhood in which European states and the EU are disadvantaged by higher fossil-fuel energy costs and American financial power. Already the failure of Boris Johnson’s government, which bet its post-Brexit “levelling-up agenda” on investment in low-carbon sectors, testifies to the problem.

With the Inflation Reduction Act, the stakes for Britain in securing a post-Brexit free-trade agreement with the United States are now quite possibly high enough to force a future choice between British companies’ presence in US-centred low-carbon supply chains and the domestic burden of accepting Washington’s trade terms. Even in the United States, reconfiguring energy production towards national self-sufficiency cannot happen quickly enough to be democratically transformative. As a response to Trump’s 2016 insurgency candidacy, this project leaves the border and citizenship issues untouched. In betting on rapidly building a low-carbon America, the Biden administration has also left itself open to the charge that it is subordinating present energy needs to an unrealisable, future-oriented project to the benefit of those corporations that procure the available subsidies.

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Has the West lost control of oil?

By Helen Thompson

Here, the fundamental problems that the energy transition presents have not shifted. Of the transformative forces unleashed by Russia’s war, game-changing technological breakthroughs of the kind necessary for a low-carbon energy future, especially on the storage of electricity, was not one. Following hard on the 2021 China gas shock, the energy trade disruption caused by Russia’s war, meanwhile, intensified the separate problem of the energy present. The 2022 crisis demonstrated just how politically hard it is for European politicians to reduce the expectations for consumption formed in a prior geopolitical era, or ask their citizens to engage with the energy poverty of people in many non-Western parts of the world.

If Russia’s war has changed the prior democratic predicaments around energy, it is by spreading energy consciousness, including letting loose the spectre of future energy scarcity in polities premised on energy abundance. Where, in the West, energy consciousness was acute for those exercising power but often weak among citizens, the war means these citizens now better understand their material aspirations and fears as energy demands and anxieties. They do so at a time when Western democracies generally have still not recovered from the blows delivered by the 2008 crash — even without a new round of bank interventions in March 2023 — and when in France violent street protest has become a persistent feature of expressed discontent.

In principle, greater energy consciousness could loosen the technocratic logic behind the original European formulation of realising an energy revolution by 2050. But it is more likely to expose the chasm between the interests everyone shares in facing climate change and the inequalities that will come from electrifying personal transport and that are always generated by high fossil-fuel prices. In this future, energy will not be a subterranean source of political disorder, as in the first two decades of the 21st century, but the principal currency of it.

This is an edited extract from the paperback of Disorder, (Oxford University Press) by Helen Thompson.

Russia is the world’s second biggest exporter — supplying nearly five million of the 100 million barrels of crude oil the world consumes every day. More than half of those exports flow westwards into Europe, through pipelines that cross Ukraine and Belarus. It’s difficult know which is the grimmest scenario: that the oil stops flowing due to sanctions or sabotage; or that the trade continues — filling the Kremlin’s coffers while Russian bombs rain down on Kyiv.

Markets are responding to the heightened risk in the usual manner, which could cost us dear. Oil shocks have a nasty habit of crashing economies — causing chaos far beyond the garage forecourt.

In July 2008, oil prices surged to a record high of $147 barrel. The knock-on effects were catastrophic. The ruinous cost of commuting undermined confidence in car-dependent housing developments, which crashed the sub-prime mortgage market and triggered the Global Financial Crisis. Meanwhile, the Russians took the opportunity to invade a neighbour — in this case, Georgia.

The oil shocks of the Seventies plunged the West into a decade-long retreat and the impact wasn’t just economic. A fragilised America was routed by the communists in Vietnam and traumatised by the ayatollahs in Iran. Meanwhile, the Russians took the opportunity to invade a neighbour — in this case, Afghanistan.

The Suez Crisis of 1956 was also soaked in oil. At the time, 70% of Western Europe’s oil supplies were imported via the Suez Canal. So when it was nationalised by the government of Gamal Abdul Nasser, panic ensued. Against American wishes, the British and French tried to seize back control of the vital artery. This prompted a furious President Eisenhower to punish his disobedient allies — by using the oil weapon. The Americans refused to release emergency supplies from their reserves, thus forcing the British to backdown — followed by France (and Israel). Meanwhile, the Russians took the opportunity to invade a neighbour — in this case, Hungary. 

As Helen Thompson explains in her excellent new book Disorder, this was not the end of the matter: “Too often seen primarily as a story about post-war British power, the Suez crisis shattered the idea that the United States would always act as an oil supplier of last resort to its allies.” The loss of trust would have lasting consequences.

A humiliated France joined with West Germany to deepen their partnership — and lay the foundations of the European Union. Thompson quotes Konrad Adenauer’s words to the French Prime Minister: “Europe will be your revenge.” Another fateful outcome was that Western Europe did a deal with Khrushchev to gain access to Soviet oil production. Pipelines were built from East to West, re-establishing Russia as a major energy exporting power. Which brings us back to today.

The nations of the West will either hang together or hang separately. In respect to energy supplies, that means putting the trans-Atlantic relationship before domestic popularity. For instance, the Biden administration could easily pander to the American electorate by restricting exports of oil and gas. US consumers would probably benefit — but only at the cost of weakening European resolve in the face of Russian aggression. Indeed, without help from their allies, the most vulnerable countries — especially those bordering Ukraine — will be left wide open to Putin’s energy blackmail. 

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By Aris Roussinos

Europeans must make sacrifices too. In particular, the Germans need to atone for the special part they’ve played in undermining Europe’s energy security. As well as permanently scrapping the Nord Stream 2 gas pipeline, Berlin must revisit the insane decision to shutdown the country’s nuclear power stations. If it’s possible to restart the reactors, then that would send the clearest of signals that Europe will do what it takes to stand strong.

It’s important that we distinguish between short-term and long-term imperatives. In the short-term, we need to secure alternative supplies of oil and gas as a matter of urgency. If that means cosying-up to Saudi Arabia, then so be it. The same goes for Iran — negotiations to reach a new deal with the Tehran government were already underway before the Ukraine crisis and should be accelerated.

Meanwhile, back home, we shouldn’t be shy about squeezing a few more drops of oil and gas from the North Sea. It pains me to say it, but this is an issue on which my fellow greens need to shut-up. Yesterday, in what may be the worst-timed letter in history, the the Climate Change Committee wrote to the British government to oppose new North Sea production. Obviously, the Committee’s main concern is climate change, but we’re not talking about using more fossil fuels — we’re taking about reducing what we buy from Putin. 

In any case, there’s a huge green prize to be won here. In the longer-term, the environmental agenda is perfectly aligned with the security agenda. 

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Putin's spiritual destiny

By Giles Fraser

Over the last few months we’ve learned the hard way that depending on fossil fuels is a threat to our prosperity — and to our sovereignty. If we want to free ourselves from the destabilising effects of volatile energy prices and to snatch the oil weapon from the hands of our enemies, then we must free ourselves from fossil fuels altogether. That can’t be achieved overnight — hence the need for stop-gap measures — but it can be achieved within a generation. 

Fundamental change is coming, the only question is how fast. So far, policy has been driven by climate change objectives, which operate on a timetable stretching into the second half of the 21st century. But the security agenda doesn’t allow us to wait that long. This isn’t about saving the planet, it’s about saving ourselves from the oil tyrants.