Comment by FuriouslyAdrift
7 hours ago
Any company should definitely be planning for the inevitable decline or elimination of China as a production and/or trading partner.
If not caused by politics, then by demographic crash.
7 hours ago
Any company should definitely be planning for the inevitable decline or elimination of China as a production and/or trading partner.
If not caused by politics, then by demographic crash.
I'm curious why you think China will decline or be eliminated, I always thought that China was a reliable as a production/trading partner and that they planned for decades ahead with programs like Belt and Road Initiative unlike western politics that only looks as far as the next election. Very open to correction on this though, thinking about it not sure what formed my opinion on this.
It’s foolish to be completely dependent on anyone else, no matter how stable the CURRENT situation is. We’ve seen this with the gulf countries and Strait of Hormuz, China with rare earth metals, Ukraine with grains, etc. Once China goes to take Taiwan all bets are off…
Your example are somewhat funny (in a not-so-funny way), the most obvious example for "foolish to be completely dependent on anyone else, no matter how stable the CURRENT situation is" is the US, from a european perspective
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We are dependent on H1b workers
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China is not a good trading partner at all. They put up barriers for companies entering their market, mandatory China employee in your company, IP theft, they subsidize and flood the market killing competition, most everything they make is lowest quality possible, lots of fraud even within China.
This just reads as sour grapes when countries don't want to deal with bad trades from Western corporations that mostly focus on extracting local populaces while inflicting as much damage to possible toward local labor groups.
Can't really be shocked when nation states enact laws to protect industries + workers.
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Their aging population will pose an extremely serious problem in the coming decades.
If demographics are a problem for chipmaking in China, then it's good to compare against key chipmaking countries.
To compare, 2024 (UN) fertility rates (highest-lowest):[1]
Alternatively (and perhaps accounting for migration etc), UN 2024 forecasts population differences in these countries between 2024-2050 as:[3]
[1] https://en.wikipedia.org/wiki/List_of_countries_by_total_fer...
[2] https://www.chosun.com/english/national-en/2026/01/24/IVHGRT...
[3] https://en.wikipedia.org/wiki/List_of_countries_by_past_and_...
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China will neither decline nor be eliminated, but there will be hardships from now on and - it would be very bad to have any kind of key reliance on them.
China threatened to pull rare earths from the menu which is how they beat Trump in the trade war, among other things which were not going to be sustainable aka farm stuff.
They want to take Taiwan eventually and that will cause potential confrontation.
So the key to China is that it just can't be a lynchpin for anything.
Major trading partner - yes.
Key partner for anything - no.
The US is already a material player in Chips, outside of Trump's 'knee jerk' and reactionary instinct based on 1980's geopolitics and stupid understanding of trade (aka 'importing = getting ripped off', or 'other people doing similar things = stealing from us') ... it does make sense to have material domestic capabilities.
The only place that can be more or less trusted to not play hard shenanigans is Europe. They will do their own regulatory things, and play rough with exports, but they would not threaten something hard.
Europe has underplayed the value of ASML etc..
China has also flipped from 'Quiet and Bide Time' to the opposite, and are not a nice geoplitical actor in their direct environs like S. China sea, although are relatively 'neutral' on most other things.
Best thing is to a) have 'reliable domestic capability' b) learn to build stuff, if not labour intensive ways c) don't depend on sketchy places for key things d) moslty carrots, have a big stick when needed.
China will never 'play fair' in terms of what we would consider 'fair' - they have their own views of everything - that's fine - but it just means has to be manaaged.
Also China should not have any access to data or popular social media / entertainment etc. TikTok must be locally managed, and strong data sovereignty rules also apply.
More of a 'good fences make good neighbours' think with them.
See former Aussie PM Rudd on 'Strategic Guardrails' - he has a good understanding.
The Belt and Road initiative is a nice try, but it's not a roaring success. The flaws of democracies are easy to see because of the openness, and whatever goes wrong usually do so over a long time. Dictatorships go wrong in more dramatic ways.
China run by engineers, America run by lawyers and you can still have a career in China as a merchant marine.
I think it's also worth noting that China today is not China from twenty years ago. The communist party ran the country but there was some form of "internal quasi democracy" and leadership changes happened, with term limits.
This changed under Xi Jinping and no one knows what the effects will be.
Labour is one part of the equation. China has really well-designed supply chains and economic zones, where getting access to related components just means walking/driving few minutes down the road. They have made huge strides in robotics as well, so the argument for demographic collapse is weak IMHO.
> inevitable decline or elimination of China as a production and/or trading partner
I don't think this will happen anytime soon, that companies will need short-term planning.
Demographic collapse is a major issue unless agi automates away completely the need for human intellect, drive, and labor on complex tasks. If x% of your population are consumers without producing then that's a net drain on the economy sustained by the 1-x% of the population that is producing. All automation does is lessen the impact of the smaller labor pool
That's already happening for the big players, or at least Apple anyway. A big chunk of iPhones are now made in India, Airpods, iPads, macbook assembly is now largely happening in Vietnam and Thailand.
Granted, I don't think continuing to shift to places with slave wages is a good thing overall, but we need complete factory automation to solve that problem (the problem of wanting cheap goods AND ethical labor). But the major players have seen the writing on the wall ever since covid lockdowns and have been slowly moving out of China since.
India wants to fine Apple $35-38 billion dollars they won’t last.
Over what timescale? Is the presumption that China, the country of one child policy, will do nothing about the problem?
China has ALREADY transitioned from an "aging society" (7% of the population over 65) to an "aged society" (14% over 65).
There are roughly five working-age adults to support every retiree today. This is going to crater. United Nations projections show that by 2050, that ratio will more than double, climbing past 50%. At that point, China will have fewer than two working-age adults for every retiree. The west grew rich before growing old. China, Vietnam, Brazil are aging as middle income countries.
The one child policy was like doing speed, it temporarily freed up massive amounts of capital and labor. But China's work force peaked over a decade ago. The bill is now due, and all the those "single children" know that they are expected to support 2 parents and 4 grandparents.
Aside from the dubious wisdom of similar interventions, cruelly forcing abortions was a lot easier policy to enforce then it would be to try to shove pro-natalist policies on people increasingly overburdened with caregiving for elders because of earlier interventions.
https://www.piie.com/research/piie-charts/2024/chinas-popula...
they already have in 2016. https://www.cnn.com/2026/01/01/china/china-one-child-anniver...
> Is the presumption that China, the country of one child policy, will do nothing about the problem?
I don't think they're foolish enough to invite the entire third world into the country to bolster low birth rates like the west does. So that leaves doing it the old fashioned way, which is a slow ship to turn around.
can you explain more on this "demographic crash" because I am not in the loop. Are you talking about population decline which I'm sure will have some effect but elimination?
Even if they mandated non-stop births from all capable females by law, it still wouldn't catch up to declines.
https://www.piie.com/research/piie-charts/2024/chinas-popula...
Massive immigration (on a scale never seen in human history) would be required. I don't see that happening with one of the most xenophobic cultures on Earth.
This isn't a problem confined to China, they just have the worst numbers. The entire "first world" is facing declines of varying degrees.
This coupled with climate change is why immigration policy is probably the single most important thing for most countries right now.
Massive immigration would cause the system to completely collapse as imported people will not respect the local economy, culture, etc. in the same as natural citizens that originally built the nation. That's not xenophobic, just reality. Importing people means importing their culture, which might be incompatible with the state.
It's a reason they began to be called nation-states - states without a nation backing it tended to flop, and nation's without a state tended to slowly (or quickly) be absorbed into the dominant culture.