[twodave]

I don’t think anyone who understands geopolitics can agree with this take.

China has been able to (for a time) sustain this kind of rapid industrialization because of globalization, a model of hyper-inflation and by taking advantage of wage inequality (i.e. paying their workers less) in order to dump goods into other countries’ markets. Take away globalization and China starves in the dark, because the part of their population that is largest, most productive and knows how to even feed itself (China is a heavy net importer of food, especially pork) is also very old. And when those people are too old to work, China is going to rely on the rest of the world to sustain its (rapidly declining) population.

There are a lot of other Asian countries in a similar situation, but China is unique in how bleak the future could be for hundreds of millions of people.

A year ago I would have said “who knows when the scale will tip?” With what’s going on lately it seems that it may have already happened. Whether you agree with the economic policy of this administration or not, the ramifications are astounding. The US is positioned to come out of this the best, at the expense of the rest of the world. This is why China is all of a sudden calling the US bullies. They would never admit weakness, but they are suddenly feeling the heat. If the US took it a step further and decided to stop securing the seas in that part of the world, all hell would break loose.

For instance, do you think Japan and China would just “play nice” with no incentive to? I’m not so sure, and China has no access to the ocean without going through Japan.

[echelon]

This argument is Peter Zeihan's thesis too, and I'm not sure it'll be what actually comes to pass.

China still has an enormous population, and if they convert their society from production to domestic consumption and ride the value-add wave, they'll follow the American growth equation. And with more people to bolster that economy, to boot. You can already see this in their dominance of electronics, drones, EVs, and green tech. They're doing advanced, bleeding edge work in all of the industries that matter.

BYD, DJI, Eufy/Anker (vs iRobot), Lenovo, Alibaba, ... China is a formidable powerhouse in advanced products and value-add. These companies absolutely rival the best of what America and the West have to offer. And if your argument is one of demographics, these companies are staffed with young educated workers from a huge and healthy pipeline of STEM grads.

I think of all the predictions about the future of China - from the incredibly bearish ones like Zeihan's "death of China", to the bullish ones that declare this the "Chinese century" - I think the truth lies somewhere in the middle.

I don't see how China doesn't become a larger version of Japan or Germany or the US. Despite some demographic and economic headwinds, they've got an incredible head start.

If America aims to compete and remain in the top, it needs to stop doing things that look like Brexit that lead to degrowth and isolation. China isn't magically going to get weaker and provide free opportunity to the United States. On the contrary, it's fantastic peer-level competition that the US should use as motivation to work harder.

China is an incredible growth and innovation story, and a bar that all countries should hold themselves to. It's no time to slouch. Competition fosters the best innovation anyway.

[skippyboxedhero]

Hyperinflation? They have been exporting deflation. Wage inequality? It is a productivity inequality, relative to the US. The idea that everyone should just be paid the same wage is quite an odd inference when you start the comment with explaining how everyone else just doesn't understand the things you do.

China moved away from the export-led model of growth about ten years ago (the largest exporter of deflation today is Germany and has been for a number of years).

China does have too many people...there is nothing they can do about that and that will limit their living standards for a long time.

China's future is only bleak if you are unaware of their history. They were poorer than every country in Africa bar one a few decades ago, what they have done is still regarded as impossible even after they did it. It is like winning the lottery and then grousing because there is someone else richer than you (which, btw, most people probably would do).

China does not trade with the US intensively anymore. The US doesn't really make anything that anyone needs, and is a big export market but not at the margin anymore...total exports to the US are 3% of GDP. Their economy has been rebalancing for decades (again, proof that their leaders are just smarter...Trump is flailing around in the darkness with tariffs rather than actually being able to design good policy, China started this ten years ago and almost done already, it would make more sense to target the EU).

China has a long coastline, their primary products mainly come through the Malacca strait...again, it is hard to take someone seriously who starts talking about their expertise in geopolitics but doesn't know which trade routes China actually uses.