Comment by AtlasBarfed
2 years ago
The powers that be seem to actively be betting that China will collapse. Some geopoliticists predicted it would happen 10 years ago, but the arguments for it are somewhat compelling:
- China is facing a massive demographic bomb from one child policy
- China is a financial house of cards. Some of the stuff I've read about is 3 billion apartments built as investments/savings which are actually worthless, local/state debt and shell games that is frighteningly leveraged, and the general cheap/empty consumption/construction that state driven funding has produced
- China is turning sharply authoritarian, possibly headed to Stalinist levels of purges and cult of personality with Xi.
- China can feed its population and gets its oil due to free trade and shipping, quite extended supply lines, which are going to get a lot more chaotic in the future. If/when China attempts to invade Taiwan, the US will impose a naval blockade on its shipping (Zeihan claims a "couple destroyers in the Indian Ocean" ... probably a BIT more involved than that) ... China will starve and its economy will stop functioning.
I think this is part of a multipronged trade war to attempt to collapse the Chinese Communist party. If you want to talk about "powers that be", consider what is on the table here: the Putin regime will likely collapse from the failures in Ukraine, and Russia (who is facing a demographic bomb almost as bad as China's) is expending its last functional generation of youth on human waves in Ukraine.
So the two major nuclear powers might collapse entirely, and the only real economic rival to the US.
Chinese property issue has been hyped since the enforcement of 3 red lines policy and that was 3 years ago. Imagine hyping Lehman crisis during Obama v. Romney election.
The thing I have found amazing about the China collapse hype train is that I have been hearing it for almost 20 years now. Economists are point out some very real issues, it is just wild how long some of these things can go on for before the breaking happens.
But part of that is just the state of economics in the realm of mass media.
To that. Economist - Definition : Someone who can tell you today why yesterdays prediction of tomorrow was wrong.
Q. What do you call an Economist that makes a prediction? A. Wrong.
>just wild how long some of these things can go on for before the breaking happens
Other point of consideration is sometimes things breaks with a whimper not a collapse. Real estate technically "broke" with 3RL = expected 2-3% drop in excess / unproductive GDP. Collapsist think PRC will turn into Yemen without pumped up RE growth, but actual RE sales is ~15% of economy, the often quoted ~30% number includes ancillary industries like construction that got redirected to other projects like renewable rollouts. PRC RE sales dropping from 15T (yuan/rmb) in 2021 to 12T in 2023 out of 100T GDP = today's "quality" growth at ~5% instead of previous wreckeless growth ~8%. Meanwhile, resources directed at actually useful strategic industries, backed by pipeline that generates about as much high skilled workers as western block combined doing actual useful things like building EVs, fabs and generally moving up value chain. IMO west is going to miss the days PRC wreckeless sunk money in real estate instead of high tech products that will directly challenge encumbant western market leaders.
You're not necessarily wrong, but the core forces these people formed some of their predictions are still happening, and worsening.
- no one seems to be contradicting the contention that the CCP under Xi has become sharply authoritarian, regressive, and is worsening
- the reported demographics may be sharply worse for the immediate forthcoming generations than previously reported: 100-250 million "missing" people, and a sharply worse male-female ration that previously reported. Again, for me, these depend on the size of the Chinese rural population, which I think might buffer demographic declines in urban areas.
- the financial "bombs" I agree are the least significant ones in terms of dramatic collapse scenarios. They are the ones all the rich care about because they might lose money, but the Chinese can print money and impose price controls and lots of other things that Western economies probably can't get away with.
What the financial numbers mean is two symptomatic signs: degree of corruption in the system but, worse than corruption, the degree of incompetence of the CCP to properly centrally manage things as they consolidate authoritarian control.
You won't find me defending economics on fundamental principles. Economists basically exist to justify the status quo power structure and are utterly incapable of constructing models to include things to price environmental degradation that might, you know, destroy human civilization.
I think that if China had not turned sharply authoritarian, they would be fine. It is a modernizing country of 1.4 billion people. But not the double-combo
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> If/when China attempts to invade Taiwan, the US will impose a naval blockade on its shipping (Zeihan claims a "couple destroyers in the Indian Ocean" ... probably a BIT more involved than that) ... China will starve and its economy will stop functioning.
China will not face starvation because it shares a land border with Russia, which has enough food to supply China if necessary. However, this scenario is unlikely to unfold, as it overestimates the power of the US in this conflict. The conflict would predominantly be a naval battle, with US forces engaging with what are essentially forts. Most war games conducted in the US indicate that in an initial battle, the US would be defeated and forced to retreat. You should read the report presented to Congress a few months ago about China's military capabilities.
> the Putin regime will likely collapse from the failures in Ukraine
Based on situation today, lets just hope that Ukraine will not collapse because we are very far from Russia collapsing. See IMF data about their economy and situation on the front.
The US is not alone in the South China Sea. Japan sees this as an existential issue, and Australia and the UK will also likely join the battle in addition to other countries against the 9 point line.
India might also become opportunistic and start to resolve its boundary disputes with China.
This also doesn’t account for Xi’s purges of the PLA including its all important rocket force.
The border with Russia is all Siberian as you probably know. You should also know that a couple special forces strikes on the rail infrastructure and ... no grain for China. Ukraine has already carried out successful raids on Siberian infrastructure. Infrastructure/logisical lines in Siberia are incredibly vulnerable: they are expensive to lay down, they are geographically extremely extended, there is basically no way to defend it. The Siberian people are not exactly pro-Moscow either, especially since their young generation has been preferentially/racially culled for meat wave tactics in Ukraine.
It is doubtful what can be essentially considered a single fragile rail route can provide it logistically.
the Russian yields are not fantastic, and atop that Ukraine is for the foreseeable future not available for providing grain.
A war with China will disrupt international trade so much that grain demand will explode (countries will probably stockpile more) and the grain providers can select 1) blockaded china or 2) any of a hundred other customers.
https://chinapower.csis.org/china-food-security/
So Brazil, Argentina would be out, can't ship to China
US would obviously stop exports
Canada, Australia, New Zealand, France: out
Indonesia, Thailand: probably out.
I agree that Russia is not in a situation of imminent collapse, neither is Putin in danger of imminent overthrow. However, demographically the Russians are expending the last of their skilled and young workers, while forcing Europe to no longer need their oil + gas, accelerate all EV / PV / Wind initiatives. Russia will lose "the last decade" of high oil profits before the demand begins to collapse.
Russia has also emboldened its other satellite conquests with its military incompetence. There was a video of Putin negotiating publicly with one of the southern states (don't remember, may have been Georgia) where the leader at the public negotiation table outright defied Putin. Meanwhile Ukraine modernizes, trains, becomes stronger and more effective. NATO is arming, and at this point Ukraine will probably be the site of an actual NATO-Russia conventional battle, which given NATO's ability for total air superiority means a complete defeat. If you're wondering who would fight the ground war given likely American apathy for another war, Poland would ENTHUSIASTICALLY fully mobilize to fight the Russians.
Down the line, Belarus's propped up government will fall, and Russia is staring at virtually a multi thousand mile border with outright NATO or might-as-well-be-NATO countries between Finland, Baltic republics, and Ukraine, and probably Belarus as I just said.
Black Sea access is very tenuous. Kalingrad is unreachable, and may secede. North Sea access is really tenuous.
Honestly the only hope for Russia is Europe doesn't arm fast enough and the US House of Reps holds up funding (which I believe 96bln just got approved).
And Russia's leadership is historically aware, what is happening as a result of this war (severing of gas supply dependence) is an armed Germany. The prospect of a fully industrially armed and modernized German military should strike a deep cultural fear in the entire Russian people.
And we didn't address the oil/petroleum issue. China can stockpile what they can, but an embargo will still result in the lights going off in China within 30 days.
China is still essentially a warlord state, and Xi is likely generating substantial resentment in the regional power centers. If the central government fails in a blockade, the Chinese state, fragmented between the free market liberal urban governments who resent the free market rollbacks, the CCP power center, and who knows in the rural areas, will crumble into warlord states.
As a side note, not a lot of people talk about the SOuth Korean demographic bomb (worst in the world), but if China falters the solution to South Korean demographics is to topple the North Koreans and import their population into the South Korean economy. I think that will happen in the next 20 years.