China is approaching demographic collapse meaning the end of China being the world’s manufacturing center.
Manufacturing will return to the US. That means stuff will cost more for consumers. But plenty of jobs and economic growth. also means higher inflation where 7% prime interest rate will be remembered as the good old days.
Zeihan did leave out Mexico. Its manufacturing base is expanding due to a competitive wage and proximity to major markets. US legacy automakers are increasingly moving production to Mexico.
Zeihan talks about population collapse resulting in lower intraChina consumption, and too few “workers” to maintain GDP, but Zeihan has NOT mentioned the humanoid robots that are being developed in China.
IF that effort is successful, then the “worker” problem will be less.
IntraChina demand and consumption will be a problem.
Unitree is the Chinese company I’ve heard of.
Note: unitree claims to be Singapore
This YT “feels” like disinfo to me. But… IDK.
Here’s a 50minute long “future” YT.
A significant part of the dialogue is that China is “ahead” in developing this robot work force - GDP multiplier.
China has gone into perilous debt (mostly to itself) to a staggering depth, and that is not only Real Estate, but also enormous levels of infrastructure (much of it shoddy and even dangerous). These mal-investments cannot pay off. High levels of governmental corruption are deeply rooted and ever more visible. Xi cannot solve it all by totalitarian clampdowns, but it is likely what he will try.
The question now is what random thing (furious middle class families whose entire retirements are lost to uncompleted unlivable buildings, dam and levee collapses rioting?) unleashes destructive discontent and even revolts.
I hope the dragon doesn’t fly off in a firebreathing rage in its pain.
that is exactly right and that is why the central gov’t will resolve it without much fracas. This is nothing like the GFC.
This is the fantasy that someone like Zeihan has been wishing for for more than 2 decades now and it is not going to happen. He does not have much understanding of China.
This seems unlikely, at least in the short term. Manufacturing capability is like an ocean liner: it takes years, sometimes decades to turn around.
I would bet on Mexico, given the proximity to high consumption markets (the US & Canada) and growing markets (South America). But even that takes time. For all the talk of re-shoring, the amount of growth in the US manufacturing sector has been pathetically small. It’s a start, but barely that.
Mexico is close enough to be monitored, even managed from the US. India is really, really far away, with a culture steeped in hondling and corruption. Which is not to say it won’t grow, just that Mexico makes so much more sense.
If China continues to stumble, and badly, expect Xi to make the move on Taiwan - a way to enrich the coffers as conquering empires have throughout history (Rome, England, Spain, the US) by assimilation, and as a way to distract the populace with a fog of reunification, patriotism, and mother-countryism.
The only things we export in quantities big enough to matter are soybeans, electrons shaped by Google and Facebook, and gas. I would have added aircraft and aircraft parts, but I have zero confidence in Boeings’ ability to continue as an export (or any, really) machine. Their only saving grace is that it takes so long and so much capital to bring a competitor on that they may survive in spite of themselves.
Meanwhile US digital tech marches across the world: Google, Facebook (et.al.), Apple, Nvidia, for now, but that’s a small employment sector compared to the financial rewards they reap. The “factories” of the heartland are, if not already extinct, on the way, to be replaced by unmanned data centers and Dollar Stores.
I would call this propaganda and something that is not close to the truth at all. But that is what the media and intelligentsia say here in the US. We should have another perspective. This is from another time (for your reference, during the Vietnam war and before Nixon’s rapprochement) but his comments are still quite relevant:
Any link to Lee Kan Yew communicating anything at all at least doubles the intelligence of a conversation, even if his POV is decades in the past, it is still more than merely relevant.
Xi’s insistence on Beijing territorial claims out to the absurdly aggressive and historically questionable “7 Dash Line” serves to unite the rest of SouthEast Asia and adjacent. Taiwan is far more deadly and capable than troup numbers suggest, and with USA, Japan, and South Korea ready to help out I expect China will remain deterred.
The “nine-dash line” wasn’t introduced by Xi Jinping but was claimed by the Chinese Nationalists after WWII, with Taiwan asserting the same claim. This issue has be be resolved by the parties involved which do not include the US.
The Taiwan issue dates back to the Nationalists’ loss to the communists, with both sides historically seeking reunification. The PRC has always stated that force might be used if necessary, which is consistent with past policy, not specific to Xi. Taiwan’s strategic significance, especially in chip production, has increased U.S. interest. Southeast Asian countries don’t see China as a major threat, contrary to U.S. portrayal, while Japan’s stance remains driven by geopolitics.
China is not the “bad actor” often depicted by the U.S. In fact, Lee Kuan Yew (LKY) hoped for a strong and prosperous China, believing it would benefit the region. Based on his understanding, he didn’t believe that China would assert itself aggressively. Instead, LKY suggested that a strong China would be positive for Southeast Asia, promoting stability and growth in the region.
The US can deter. China will do what it will have to do.
But instead, the CCP’s power corrupted that possibility, as self-interest, corrupt self-dealing, and ideological nonsense all threatened by the horizons opened up by Deng Xiaoping’s “opening up” have closed things back down.
From my perspective, China is doing what it needs to do. Deng Xiaoping made the right decisions at the right time, focusing on economic development through an investment-driven model, which was highly successful. However, this model often leads to over-investment or mis-allocation of resources. Recognizing this and transitioning to the next phase is challenging. While China may not have all the answers, neither do outside critics. We tend to judge without fully understanding the complexities involved.
That is an internal problem. As LKY had expected China has not shown any aggression towards any SE Asian states nor any other state.
I think the US financed the entire buildout in China. The financial swaps are no longer worth carrying on the books. Without us China has been wasteful and nutty. Xi being the nuttiest part of China. Although Mao before him was an insane nutty criminal.
It is time for the US to rise. We are retooling. As it was in the beginning it shall be in the end. Except this time there won’t be nearly as much smog. Alpha Omega.
adding
There is a fascinating instinct to see leaders as all sorts of positive things. Xi is a simple horror. There is nothing to the man worth anything as a human being. He is the worst person in China.
