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China’s Greatest Strategic Blunder: How Kim Jong Un Plays Xi Like a Fool

Geopolitics often looks like a chess game. But in this case, Kim Jong Un is playing 4D chess… and Xi Jinping isn’t even playing checkers.

For decades, Beijing has treated North Korea as its “strategic buffer zone” — a barrier against U.S. military power in East Asia. Billions in aid, fuel, and food have flowed across the Yalu River. In return, China expected loyalty, alignment, and leverage.

Here’s the problem: this entire strategy is built on obsolete logic. During World War II, having a physical buffer made sense. But in today’s world of intercontinental ballistic missiles and nuclear weapons, distance means nothing. North Korea’s very existence doesn’t shield China — it endangers it.

Consider the Facts

Kim Jong Un’s regime is built on nuclear weapons as its sole survival strategy. Every test he conducts near China’s border risks escalating tensions with the U.S. and Japan — right on Beijing’s doorstep. Far from “tying down” American forces, North Korea’s actions justify an even larger U.S. military presence near China.

Worse, Kim has zero respect for Beijing. He takes Chinese aid, then uses it to strengthen his independence from China. He plays along with “socialist brotherhood” symbolism when it suits him — like attending a military parade — while secretly mocking Xi’s desperation.

Xi’s Ideological Trap

Meanwhile, Xi is trapped by two ideological chains: Mao’s legacy of the “War to Resist U.S. Aggression and Aid Korea,” and the CCP’s narrative of socialist solidarity, which Xi has woven into his “national rejuvenation” vision.

These chains prevent Xi from admitting the obvious: North Korea is no ally. It’s a liability, a rogue state holding China hostage.

The Ultimate Irony

Some CCP hardliners fantasize about using North Korea as a partner in a Taiwan conflict. In reality, Kim would do whatever benefits Kim, likely stabbing Xi in the back when it matters most.

The Strategic Takeaway

China’s decades-long investment in North Korea has produced the opposite of security. Instead of a shield, Xi has created a time bomb — one that could explode at any moment, destabilizing China’s entire northeastern frontier.

Geopolitics isn’t about sentiment or legacy. It’s about cold, hard calculations. And on that front, Kim Jong Un has outmaneuvered Xi Jinping completely.

Hedge Fund Founder | Portfolio Manager | YouTube Commentator | Newsletter Author

Ken is the portfolio manager of the YCC International Value Fund, LP, a hedge fund positioned to capitalize on China’s economic unraveling and the global restructuring of supply chains. He runs the fast-growing KenCaoMacroLens YouTube channel, where he explains complex economic and geopolitical shifts for investors, policymakers, and the broader public. He also authors The China Crash Newsletter, covering China’s decline, the rise of Japan and Taiwan, and the forces reshaping Asia.

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Ken Cao

Ken Cao

Hedge Fund Founder | Portfolio Manager | YouTube Commentator | Newsletter Author
Ken is the portfolio manager of the YCC International Value Fund, LP, a hedge fund positioned to capitalize on China’s economic unraveling and the global restructuring of supply chains. He runs the fast-growing KenCaoMacroLens YouTube channel, where he explains complex economic and geopolitical shifts for investors, policymakers, and the broader public. He also authors The China Crash Newsletter, covering China’s decline, the rise of Japan and Taiwan, and the forces reshaping Asia.

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