Pincer movement
Signal and noise
A pause from the pause… Notes will most likely continue to be irregular, as the space for thought shrinks and sinks. This is partly due to mundane reasons, notably the realities of ‘actually existing academia’ in 2025, as well as the continued involution of Substack, all alongside the shocks and surprises that are shocking but not so surprising.
Things are changing in ways that are really real and really consequential, and we need to be aware and alive to what matters amidst the mess. Part of the challenge is that there is simultaneously a lot of signal and a lot of noise (first image care of wiki, second image slopped by GPT).
Jean Baudrillard, the untimely one, spoke to all of this. Writing in 1995:
Thought must anticipate, be exceptional, and in the margin - the projected shadow of the future events. Yet, today, we are lagging behind the events. They may sometimes give the impression that they regress, that they are not what they should be. In fact, they have passed over us for a long time. The simulated disorder of things has gone faster than us. The effect of reality has disappeared behind the acceleration of things - an anamorphosis of speed. What happens to the heterogeneity of thought in a world that has been converted to the craziest hypotheses and to an artificial delirium? In their accelerated occurrence, the events have in a sense swallowed their own interpretation. Things have been cleansed of their own meaning. And consequently, they are like black holes and can no longer reflect. They are what they are, never too late for their occurrence, but always beyond their meaning. What is late rather is the interpretation of things. Interpretation is then merely a retro figure for an unpredictable event.
Acceleration accelerates, disorientation deepens.
Nonetheless, it is increasingly unsatisfactory to continue gesturing towards an ‘interregnum’ and the ‘end of the liberal international order’. Rather, there is need to reconcile such developments with thought and practice, and to look for signs of what is congealing. From debt to drones, gold to GPUs, manufacturing to markets, all these hockey sticks speak to new conditions forming. Amidst all the noise, we need to identify the signals and start trying to sketch out what is taking shape.
In 2025, this vortex is unfolding in and through the two not-so-great powers. On one side, the US is doubling down on ‘ludicrous speed’, and on the other, China continues at ‘China speed’. The temptation, of course, is to place this into clean narratives and Zakaria-GPT op-eds, ‘As America fumbles, China races ahead’. The more considered version is Dan Wang channeling the dead-not-dead ghost of Robert Kagan’s ‘Americans are from Mars and Europeans are from Venus’ into ‘China is an engineering state and America is a lawyerly society’. Perhaps distinguishing between cookers and communists might be more appropriate.
With all of this comes a lot of projection in and through the Great Other. Some look back and yearn for an idealised version of a ‘responsible’ US and a well functioning rules based order, others look forward and hope for a ‘benign’ China that provides cheap and powerful green tech needed to electrify the world. Faced with the decadence and decay of the US, it is easy to see the lure of robots and solar scaling fast and far. And yet, the realities are much more tired and tawdry, confused and contradictory.
Whether we want it or not - and most of us do not - we are stuck in bad bipolarity. The reason for this is simple enough: it is impossible to avoid what the US and China do and will, their choices and chances reverberate across the globe. And so, the vast majority of the world - characters, collectivities, companies, countries - are increasingly caught in an unforgiving pincer movement undertaken by these duelling not-so-great powers, unattractive poles that still attract.
As Moreno Bertoldi and Marco Buti observe:
The fight for hegemony, together with the specific nature of the two superpowers, is creating significant damage to the rest of the world. These effects are compounded by certain commonalities between the US and China.
Bertoldi and Buti present the US as an ‘extractive’ superpower and China as a ‘dependency’ superpower. This rendering is directionally correct but too caught in the moment. Rather, both are effectively different accents on a similar desire for leverage, control and dominance. One has to wonder whether policymakers on both sides read Henry Farrell and Abraham Newman’s Underground Empire: How America Weaponized the World Economy as a book for tips on how to squeeze.
The discomfort that most feel is that both powers are strong enough to be determinative and weak enough to be dangerous. Team America demands the world join their bender as they get pilled, red, white and blue; Team Xi is determined that we all must eat bitterness together. Neither option is particularly appetising, alas both options are hard to avoid.
In prior notes, I have described China’s approach to economic security in these terms:
Instead of the ‘flying geese’ model, China has adopted the ‘Pac-man approach’ to economic development and security: it will eat as much as it can. Low end manufacturing through to high tech, coal to solar, anything and everything.
Against China’s Pac-man economy, the US has its ‘SPAC-king’ model of pump and prime. Debt and finance, tech and AI to the moon. Neither approach seems especially sustainable, yet neither side seems especially capable or willing to adjust course.
In ‘China’s Data Still Doesn’t Add Up’ (August 2025), Brad W. Setser with Michael Weilandt estimate the size of China’s current account surplus as considerably higher than what is stated:
A realistic estimate for the current account surplus, using China’s pre-2021 customs-based BOP methodology (which corrects for the puzzling investment income deficit) would put China’s current account surplus around $1 trillion, or about 5 percent of China’s GDP.
One does not need to be Michael Pettis to figure out this kind of imbalance is not healthy or sustainable, yet it is the path China seems determined to pursue. Similarly, one does not need to be Thomas Piketty to figure out America’s ‘K-shaped economy’ is not healthy or sustainable, yet it is the path the US seems determined to pursue. Both countries are simultaneously strong and weak, while doubling down on decisions and behaviours with little regard for how their wilfulness reverberates.
Compared to the relative conformity of the post-Cold War neoliberal era, what we are now seeing is more difference, with the two countries effectively placing different bets. As Francesca Bria suggests:
Whoever controls AI infrastructure — compute, models, data and cloud — will shape the economic and political order of the 21st century. The U.S. and China understand this and are mobilizing every instrument of statecraft to secure supremacy.
It is worth keeping this in mind when considering any talk about some type of great power ‘spheres of influence’ arrangement that divides up geographical regions. Increasingly the sphere that matters is the stack. Bria’s article is accompanied by a helpful representation of the foundations on which present and future societies rest. To simplify and schematise greatly, one could think of China’s approach being bottom-up, and the US’s as top-down. One hungry, the other decadent, both want to eat and own it all.
China appears to be focused on building up and controlling the industries and supply chains of the 4th industrial revolution, and seek to use AI to move toward this aim. George Magnus in FT Alphaville on what China is now undertaking:
The impact of Chinese industrial policy on the world economy is so large that Donald Trump’s tariffs are, by comparison, a minor nuisance. America’s roughly 8 per cent share of world imports is less than half of China’s share of world exports. And the industrial policy-export nexus is not only aggravating China’s own domestic systemic problems, but becoming increasingly problematic for a growing number of countries.
The economist Barry Naughton, renowned guru of Chinese industrial policy, has described China as being engaged in ‘the greatest single commitment of government resources to an industrial policy objective in history.’
The conclusion to Barry Naughton’s study on Chinese industrial policy reads:
It is unclear to what extent Chinese policy-makers have considered the technological, economic, and international risks of their industrial policies. It appears rather that policy-makers have been seduced by the vision of a technological revolution and a substantial re-ordering of global strategic relations and have rushed ahead with an aggressive and decisive round of industrial policies. At a minimum, this is an enormous gamble.
In contrast, the US is effectively betting the house on AI supremacy as the ‘ring to rule them all’. For such supposedly clever people, the logic is rather simple: reach AGI (Artificial General Intelligence), or get close enough, and that will solve everything else. On this increasingly singular rush towards singularity, Adam Tooze has proposed ‘a malign coincidence of technological and industrial imperatives with political momentum has created a powerful alliance of convenience’ between Trump and big tech:
The hyperscalers don’t care about anything five years hence because they believe that our collective destiny is being decided in the current moment by the manic accumulation of compute power and AI algorithms. Their clock is running not on decades but on months and quarters. The big tech firms never cared much for existing rules, regulations or laws. They care even less right now because they are racing towards a radically new future, which is just around the corner.
At which point, it might be suitable to bring in this chart found by FT Alphaville, which ‘shows GDP per capita from 1870 to 2024 along with scenarios, some of them extreme, depicting what could happen to living standards between now and 2050.’ Good to know that the Dallas Fed are confident in asserting human extinction would had a negative impact on living standards.
We do not need such graphs to appreciate the absurdity of our conditions. 2025: the game is on, the stakes are high, Pac-man vs SPAC-king, place your bets. Tails or heads, whoever wins, we lose. Both routes offer the promise of extreme power imbalances and considerable deflation at the price of human and societal stability. Power for them, Temu for thee, slop for me.
This note is very sketchy and incomplete, but there is a pressing need to try thinking through what might be starting to take shape. Repeatedly in different meetings this year I have been struck by a deep, persistent refusal to acknowledge the changes underway, and a constant clinging to old models and expectations that no longer fit. There are few signs that China or the US are changing course anytime soon, and the choices they are making are pointing and pushing towards somewhere quite different from what we’ve experienced.
It is not possible to escape these two not-so-great powers, but how other countries interact with them is consequential. There are middle powers with more capacity for action if they had a bit more imagination and backbone. On this, Bertoldi and Buti judge:
Overall, US and China’s current policies are making the world less stable and generating global disorder. However, as they are not facing any serious pushback yet, they are likely to continue in the way undertaken, expecting that the rest of the world will either adapt and comply with their desiderata or face retaliation. Global resistance to the two superpowers prevarications so far has been weak and disappointing, in particular by middle powers that could have made “a statement about who they are and what they stand for” (Rodrik, 2025), but they did not.
To put it mildly, we face a dearth of political leadership, and few signs of this changing. Moving from the mid of the middle to the micro, we are along for the ride on this, whether we want or wish it. Earlier this year, Erik Davis presented a pair of talks on ‘Navigating the Weirdness’ in which he observed:
We have little choice it seems but to also develop practices that, however we act on and in the world, also work inwardly and cannily with our attitudes, modes of awareness, and roiling emotions. This is not self-help, let alone self-realization. It is survival, or at least sanity.
In order to defend against a pincer movement, one must recognise what is happening, and from there, figure out how to respond. Time to give attention.