The Chinese leadership – fed up, at being hectored by US and the EU over Ukraine - and with the ‘spy balloon’ shoot down being the final straw, has ceased taking calls from Washington.

European North Atlanticists (Von der Leyen and Annalena Baerbock) did get to visit China (to relay messages from Team Biden), yet they also got a frosty warning to cease the attempts to disrupt China’s relations with Russia. 

So, Secretary Yellen entered the fray. She delivered a speech on the US-China relationship. Though billed as a conciliatory gesture (the FT highlighted its message as being: ‘De-coupling: A disaster for all’), the underlying ‘plumbing’ was ‘anything but [conciliatory]’.

Yellen implied that China had prospered on the back of the global ‘open-market’ financial order, but that now China was pivoting toward a state-driven posture; one that is confrontational towards the US and its allies. The US wants to co-operate, ‘yes’ indeed; but wholly and exclusively on its terms.

The US seeks constructive engagement, but is subject to the US securing its security interests and values: “We will clearly communicate to the PRC our concerns about its behaviour … And we will protect human rights”.  Secondly, “we will continue to respond to China’s unfair economic practices. And we will continue to make critical investments at home – while engaging with the world to advance our vision for an open, fair, and rules-based global economic order”.

Yellen finishes by saying that China must work with the US on issues of mutual interest, but for the relationship to be healthy, China must ‘play by today’s international rules’.

In other words, Yellen’s address stands in the long line of Administration speeches, all exalting the Western-dominated ‘Rules-Based Order’.

Unsurprisingly, China will have none of it -- noting that the US seeks to gain economically from China, whilst demanding a free hand to pursue exclusively US interests.

Put simply, the Yellen speech is not only a diplomatic ‘faux pas’ in demanding China’s subjugation to US setting not just the geopolitical ‘rules’, but also those of the financial system, the technical protocols, and the manufacturing standards for the planet.

The speech displays a complete failure to comprehend that the Sino-Russian ‘revolution’ is not confined to the political, but extends to the economic sphere too. Or is it that the West simply pretends not to notice?

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President Xi had made this clear in 2013 when he asked: “Why did the Soviet Union disintegrate? Why did the Communist Party of the Soviet Union fall to pieces? … To completely repudiate the historical experience of the Soviet Union, to repudiate the history of the CPSU, to repudiate Lenin, to repudiate Stalin - was to wreck chaos on Soviet ideology and engage in historical nihilism”, Xi said.

Put plainly, Xi was implying that, given the two poles of ideological antinomy -- that of the Anglo-American construct, on the one hand, and the Leninist eschatological critique of the western economic system on the other -- the Soviet “ruling strata had ceased to believe” in the latter, and consequently had slid into a state of  nihilism (with the pivot to the western liberal-market ideology of the Gorbachev-Yeltsin era).

Xi’s point was clear: China had never made this detour. And what Yellen’s speech wholly misses is this geo-strategic paradigm change: Putin has brought Russia back, and into broad alignment with China and other Asian states on economic thinking. 

The latter have in effect, been saying for some time that ‘Anglo’ political philosophy is not necessarily the world’s philosophy. Societies may work best, Lee Kuan Yew of Singapore and others have said,  were they to pay less attention to the individual, and more to the welfare of the group.  

Xi Jinping says it straight: “The right of the people to independently choose their development paths should be respected … Only the wearer of the shoes knows if they fit or not”.

Marx and Lenin however, were not the only ones to challenge the Anglo-liberal version: In 1800, Johann Fichte published The Closed Commercial State; in 1827, Friedrich List published his theories which took issue with the ‘cosmopolitan economics’ of Adam Smith and JB Say. In 1889, Count Sergius Witte, a Prime Minister in Imperial Russia, published a paper citing List, and justifying the need for a strong domestic industry, protected from foreign competition by customs barriers. 

Thus, in place of Rousseau and Locke, the Germans offered Hegel. In place of Adam Smith, they had Friedrich List.

The Anglo-American approach is premised on the basis that the ultimate measure of a society is its level of consumption. In the long run however, List argued, a society's well-being and its overall wealth are determined not by what the society can buy, but by what it can make (i.e. value arising from a real, self-sufficient economy). The German school argued that emphasizing consumption would eventually be self-defeating; it would bias the system away from wealth creation, and ultimately make it impossible to consume as much, or to employ so many.

List was prescient. This is the flaw so clearly now exposed in the Anglo model: the original failing now aggravated by massive financialization -- a process that has led to the building of an inverted pyramid of derivative financial ‘products’ which has sucked the oxygen from the manufacture of real output.  Self-reliance erodes, and a shrinking base of real wealth creation supports ever-smaller numbers in adequately-paid employment.

Put simply (for Hegel and List said much, more besides), where Putin and Xi Jinping come together is their shared appreciation of China’s astonishing sprint to the ranks of an economic superpower. In Putin’s words, China “managed in the best possible way, in my opinion, to use the levers of central administration (for) the development of a market economy … The Soviet Union did nothing like this, and the results of an ineffective economic policy impacted the political sphere”.

Washington and Brussels clearly don’t ‘get it’. And Yellen’s speech is the prime ‘exhibit’ of this analytic failure: The world doesn’t work that way anymore.