China Has 10 Years Left, Says Geopolitical Analyst Peter Zaihan

The rich world was a population column from 1945 to 1992. And with the end of the Cold War, the developing world became a column in 1992 until now. The problem is that this is all temporary. Because birth rate keeps dropping, people keep living older, and your column eventually inverts into an open pyramid, upside down. And now you no longer have children. You no longer have a replacement generation at all. And there aren't enough people in their 20s and 30s to buy everything. And there aren't enough people in their 40s and 50s to pay for the retirees. So this decade was always going to be the decade that most of the advanced world moves into mass retirement, and the economic model collapses. And next decade was always going to be the decade that that happened to the developing world. And we find out recently that the Chinese have jumped the ship, and this is their last decade too. So all of the globalized connections and consumptions that create the world we know, we are at the end of it. And we have to go back to a world where trade is more focused on the countries that have a better demographic and security infrastructure, because the Americans are no longer patrolling the global oceans anymore. So we're losing the security ramifications of an open system. At the same time, we're losing the demographic capacity to support it in the first place. And that's all going down right now. So when you're saying that China has 10 years to go... At most. What do you mean by that? Well, we now know that they've lied about their population statistics, and they overcounted their population by over 100 million people, all of whom would have been born since the one child policy was adopted. So this is one of those places where they've got more people in their 60s and their 50s and their 40s and their 30s and their 20s. What was the logic behind the one child? Was it that they were overpopulating? Mao was concerned that as the country was modernizing, the birth rate wasn't dropping fast enough, and that the young generation was literally going to eat the country alive. So they went through a breakneck urbanization program, which destroyed the birth rate. At the same time, they penalized anyone who wanted to have kids. And both of those at the same time have generated the demographic collapse we're in now. And the problem with that also was that they wanted male children. Yeah, there's a cultural aspect to that too. And obviously, men can't have kids on their own. What is the ratio to men to women in the younger people in China now? Before the data revision, with the last set of lies, it was about 1 to 1.2. It was the most distorted in the world, even more than Sri Lanka, where there had been a civil war for 30 years. Since then, we don't have good sex by sex data, but it's undoubtedly worse. And so what are the other problems that they're encountering that leads you to believe that they only have 10 years left? Well, without young people, we've seen their labor costs increase by a factor of 14 since the year 2000. So Mexican labor is now one-third the cost of Chinese labor. Their educational system focuses on memorization over skills. So despite a trillion dollars of investment in a bottomless supply of intellectual property theft, they really haven't advanced technologically in the last 15 years. Mexican labor is probably about twice as skilled as Chinese labor now, even though it's one-third the cost. We've consolidated into an ethnic-based, paranoid, nationalist cult of personality, and it's very difficult for the Xi administration to even run it because it's not an administration anymore. No one wants to bring Xi information on anything. So Putin lied to his face, for example, last February about the wars, and why would I invade Ukraine? And you can see in some of the presses the defense guys in the back of the room, like, I didn't want to say anything because Xi has a history of shooting people he doesn't like. And so the Chinese were the only country that was caught with their pants down when this all went down. The Biden administration is basically taking the trade policy of Donald Trump and running it through a grammar checker and putting it into institutions. So we now have tech barricades that prevent the Chinese from buying the equipment, the tools, or the software that's necessary to make semiconductors. In fact, he went so far as to say any Americans working in the sector have to either quit or give up their American citizenship. Every single one of them either quit or was transferred abroad within 24 hours. So the tech system is stalled. They don't have the young people to go consumption-led. They're completely dependent on the US Navy to access international trade. They are the most vulnerable country in the world right now. And based on how things go with Russia, we're looking at a significant amount of raw materials falling off the map, specifically food and energy. And the Chinese are the world's largest importer of both of those things. So there's no version of this where China comes through looking good. And the challenge for the rest of us is to figure out how do we, in as smooth and quick as a process as possible, figure out how we can get along without them, because they are going away. And they're going away this decade for certain. Well, if you say they're going away, clearly they're not just going to lay down. No, they'll die. They're going to try to adjust. Yeah, they'll die. Right? But how so? Do you think this is because, like, what is, other than, well, here would be a big problem, right? Taiwan. Like, if we impose the kind of sanctions that we've imposed on Russia, if China decides to invade Taiwan and the world stands up and the world imposes sanctions on China, how does that go? Very ugly for the Chinese. So, you know, say what you will about the Russian economy. It's corrupt. It's inefficient. It's not very high value add. But it's a massive producer and exporter of food and energy. You put the sanctions that are on the Russians on Beijing and you get a deindustrialization collapse and a famine that kills 500 million people in under a year. And the Chinese know this. They can only push so hard. Also, you know, you can make the argument that if the Russians succeed, they actually solve or at least address some of their problems. Even if the Chinese were able to capture Taiwan without firing a shot, it doesn't solve anything for them. There's still food importers. They're still dependent on the United States. There's still energy importers. And even if they take every single one of those semiconductor fab facilities intact, they don't know how to operate them because they can't operate their own. And their own are among the worst in the world, not the best. The only reason, in my opinion, to be concerned about a Taiwan war is because Xi has so isolated himself that when one person is making all the decisions and that one person refuses to access information to make the decisions, strange stuff happens. And when you say refuses to access, what do you mean by that? He does not have normal information flows anymore. Even at the height of the Trump administration, when Trump was basically isolated himself from the entire intelligence community, he was still getting the daily briefing. There was still information being put in front of him. But Xi is so isolated himself. He doesn't want to hear anything except for what he wants to hear. And since no one knows what the status of the conversation with the voices in his head in on any given day, no one wants to bring him anything unless they're ordered to. How do we know this about him? Because there's no one to listen to anymore. That's one of the fun things about Russia versus China right now is that the Russian information security is so poor that American intelligence is literally listening in on everything. But in China, we can hear into the office, but there are no conversations happening. What do you mean by that? What do you mean? So no one talks to him about anything? Anything. If you look at the- So he's just terrifying to people. Yeah, exactly. Because he murders dissidents, he murders anybody that- He doesn't murder everyone, but there's a lot of people in prison. And there's also a lot of billionaires that got disappeared. Right? Yeah. And any dissent. Yeah. It's you're either executed or exiled, intimidated into silence. There's a variety of options. And if you look at the third party Congress that we had late last year, that's when they select the Politburo. Everyone on the Politburo now is a personal flunky. There is no one from a different faction. There is no one that has a history of being incompetent. Whoo. And what is their plan? The Chinese? Do they have any idea of what their plan to get out of this is? Nationalism. If you know that the economic situation is going to go to pot, then you have a couple of options. Option one is you try to cut a deal with a country that can help you out, but the only country that could do that is the United States. And the sort of strategic surrender that the Americans would require is not something that the Chinese would accept. So think about Germany in 1946. That's the scale of support and control that the Americans would insist upon for giving the Chinese a lease on life. But if you go with nationalism, give people a non-economic reason to support the state. So even if you lose your job, even if you can't feed your family, I'm Chinese, I'm Han, that's enough. That has been the strategy for the last couple of years. Will it be enough to preserve the CCP? Too soon to know. And they're also in the middle of the worst aspect of the pandemic for them ever. Which is very strange for us because we're on the other end of it. So what happened over there? Well, let me start by saying, I think it's safe to say that no country has really figured out how to handle this well. Second, I will say there are seven different variants circulating in Beijing right now, or in China right now. Three of them did not exist two or three months ago. And it takes about six months of data for you to get good information on the R0 and the lethality. So we just don't know. And then third, in part because of Xi, when you're a one-man state, all policy and all authority starts and stops with you. And unless you're providing very clear guidance on everything, which is impossible for one person to do for a whole country, especially one the size of China, the bureaucracy either goes into automatic or does nothing. Well, right now it's doing nothing. So the data decisions in China are not to gather data and figure out what we can do. It's to instead of gathering data and lying about it, we're just not going to gather any data at all. So we're not going to know how bad these strains are until they get out of China and circulate in the rest of the world for six months. So the lowest fatality estimate that I have seen that I consider credible is that they're going to lose a million and a half people. Just from COVID. That assumes no broader breakdown in the health system, which we are already seeing. And is this because they don't have natural immunity because of the rigid lockdowns that they encountered? Yeah. From a plus point of view, they did keep the virus out of the population for almost three years. So no one has natural immunity. But we also know that their domestically generated vaccines aren't great. And most of the countries that used them in order to get their kind of first batch then moved on to a Western model that worked better. So they had a two-fold problem. They did not have vaccines and they didn't develop natural immunity. And now everyone's getting hit all at once with a virus that has at least 50% more communicability than the measles. And their overall health? Is worse than ours. Diabetes as a percentage of the population is higher. They don't have a critical care system like we have. And their hospitals are really their only line of defense. They don't have a clinic and a doctor system in the towns like we do. And what about nutrition education and the understanding of... Yeah. When you industrialize very, very quickly, especially in a culture like China where food is considered a sign of wealth, getting fat is the thing to do. So we've got a lot of diabetes, a lot of hypertension, a lot of overweight people, and over two-thirds of the population lives in a metro region and their air quality sucks too. So we're kind of seeing like the worst aspects of the Indian system and the American system all in one. So obviously the United States government is aware of all these things, correct? Well let's not oversell it, but broadly. Broadly. Have you been brought in to talk to people? Because you have a very comprehensive view of this that includes energy and nitrogen, fertilizers, everything. Has anybody ever brought you in and said, Peter, can you give us an assessment of what we're really dealing with? Sure. Each individual expert has to contribute to it because you're giving an overall sort of comprehensive view of this. I'm happy to say that I am doing some work with the Defense Department. I can't talk about the details obviously, but I think it's good to give credit where it's due. One of the many, many things about the war on terror that reshaped the US government is that we focus all of our intelligence apparatus on supporting the troops, which is reasonable. So instead of thinking, you know, it's 2045 and you're thinking over the horizon, who's our foe going to be and what kind of tank are they going to use so that we can start preparing, which is what we used to do. It instead became there's someone in the other side of this door and the third floor of this building at the edge of town in Fallujah. What side of the door the hinges are? Because we need to know if we need to blow it off the hinges or kick it in. So we focused all on that second thing for 20 years, which meant not only did we lose all the analysts who knew how to think forward, we lost all the people who trained them. Twenty years is a long time. So even if everyone in DOD or the intelligence community disagrees with everything I have to say, and I have some friends, I have some colleagues, I have some non-friends who listen, the fact that they're trying to rebuild that capacity is a really good sign. And the fact that they started rebuilding that capacity so soon after the war on terror ended means that they recognize the hole in the system. This is a good sign.