That is a nice way to put it. To be even more confident I say wait until China PPP reaches 2x that of US. 2035 is my bet.
At this point I don't think China is ready yet. It takes time to get familiarize with the new equipment and training is time consuming.
Yeah, but the structure of the GDP PPP matters too. America's is 80% structurally services, completely useless for any kind of war economy.
In terms of the real economy and industrial size, China is already many times above the US (10 times steel production in 2022 - example).
We are at late stage of number 2 right now. Still need to rid of the US debts, dedollarize.
I think that it's even better for China not to get rid of the US debt and currency before the war starts. The more it has, the more damage it can cause by creating a worldwide dumping avalanche effect.
And even if it wanted, its CB can't get rid of the dollars and US bonds completely as long as the US is its largest trade partner and market and the dollar is a global currency due to trade mechanics.
It can only try and reduce the holdings to the maximum, which it has already doing for quite some time, and maybe increase the gold holdings (already the greatest in the entire world).
Also, domestic savings rates (in yuan) are the highest in the world in all categories and the government can easily tap into that for war efforts due to how much power and trust it has.
So, it doesn't matter that they will lose so much value in dollar and US bond holdings when they already have the highest gold reserves and domestic savings rates in the whole world.
It doesn't matter that China can't reduce the exposure completely before the war, as I will explain, it's even better to hold as much as possible when the war starts, it's not a negative, it is a positive.
It will allow China to economically demolish the US. This is the economic nuclear bomb.
For example, let's take Russia for example, I think it went even better for them that their 300 billion of central reserves got stolen.
In that way, the West consciously or unconsciously launched an entire long-term wave of de-dollarization around the world, showing their hypocritical faces.
It paved the way for the localization of trade currency use nowadays and mechanisms allowing for potential future easier complete switching off from the Western financial system.
But, imagine if the war starts, and China + HK (the largest US creditor) and dollar holders start dumping their currencies and bonds on the world market right away.
Imagine then the rest of the world following the selling and dumping due to the diversification and fear, and the hyperinflation started in the US.
(if no one buys their bonds, they have to fill their trillions-strong deficit with money printing and hence cause hyperinflation, because the world is dumping dollars too as well).
China's willingness to sell 1 trillion of something certainly wouldn't be a small thing and it would cause an earthquake in international markets. Even if no one buys it, the dumping intention would ensure that the US can't raise any more debt for the war.
Then you add that to the sociological situation I described in the US a few pages ago, and you have a civil war inside the US.
The same logic follows for Chinese exports in the US - it is smart
not to diversify, before taking Taiwan, because most of the damage can be dealt with in that way.
Up to 1 trillion of debt dumped, no one else started buying, and the US depends on foreign debt to survive due to deficits, especially in a case of war, 600 billion imports from China lost, empty shelves - supply side hyperinflation, even more hyperinflation due to trillions of dollar dumpings and hence exchange rates worsening, etc...
The US is like a drug addict, they are completely dependent on China economically (biggest creditor, currency bag holder, provider of real goods), whom they constantly provoke and want to go to war with. And all that with worse societal divisions and the shittiest social situation in the whole world. Perfect conditions for the civil war and collapse of the country.
Economically and sociologically China is already 100% ready for war, tens of times better prepared than the US, and militarily it's ready in my opinion too (if you factor in short-term possible industrial might and home terrain advantages).
But there is always a fog of war involved in those types of WW3 scenarios, that's why the Chinese government wants to be 200% safe, not 100%.
