I just can’t see the PRC and the CCP in its current form sticking around long enough. Between their demographic collapse and pushback on globalization amongst some of the largest nations and economic zones who trade with China (not the mention China imports most of its food), we will see the CCP take an even firmer grasp just before it either collapses or disintegrates. We will likely see the largest cities revert to self-governance and then we will have a better understanding of the geopolitical landscape in which we will all operate in. If Hong Kong‘s economic and political influence positions it to self-govern once again, perhaps taking much of Guangdong with it, we may see more respect for global IP protections.
PRC global trade increased by 1 trillion with a T in the last 4 years, more than the prior 10 years. That's the greatest expansion in globalism... ever. Most with the global south, some of which is redirected trade to western block who realized they can't decouple but only derisk while the PRC has increased global integration more than... ever. Meanwhile PRC is moving from 25% skilled workforce to 60/70/80% like an advanced economy by spamming ~5M stem per year - for next 20-30 years they'll be reaping the greatest concentrated pool of skilled labour demographic dividend... also ever. Maybe post 2060s demography will be an issue like JP whose problem is they couldn't replace skilled labour at parity and even then they just merely stayed... very competitive. That's what a PRC "collapse" will look like, a massive Japan (as in multiple Japans) where median projection paints 2100 PRC as the second largest country with a skilled workforce many times larger than 2023 PRC. Conveniently, also one that doesn't have to import calories/energy. That's the problem with focusing only on the demographic pyramid and not actual demographic workforce composition. Yes PRC will have demographic challenges, but demographic trends also point toward overwhelming PRC global competitiveness and geopolitical security.
PRC global trade is propped up by extremely low-value, often non-essential goods on the export side and they import much of very essential food supplies and some other raw materials to make these goods. We have already seen a shift in manufacturing to Mexico which benefits the US with a skilled labor force enjoying low CoL, all within the North American free trade zone.
Low-end semiconductor manufacturing is one of
the last essential things the world imports from China, but much of this is already moving to Vietnam. Medium to high-end semiconductor manufacturing largely takes place in Japan, Taiwan, and the United States - all of which are allied together and will respect export restrictions. We will see Germany (another ally) step in once their fabrication facilities are complete and operational, maybe by 2026.
Calling their wide-scale demographic collapse as merely “challenges” is disingenuous. This is a looming complete and total catastrophe that will spark a humanitarian crisis, the likes of which the world has not seen before. Their short-sighted one child policy they had into place from 1979 to 2015 has robbed them of more than half of their 30-40 year olds, people at their prime working age, just as their parents are entering retirement. The legal obligation of children to take care of their parents in their old age had put additional burden on the single child of each parental union. These adult children are putting off having a family of their own due to this. This cycle continues.
And this is just the stuff we know about. We likely won’t even know how many people died of COVID-19, what are the figures of major events that we don’t even know about? Disinformation campaigns stamp out people speaking ill China, but when all this comes to a head, it will seem sudden but will the crescendo of compounding events, falling onto the next like dominos.
This is like 2005 understanding of PRC economics and comprehensive power.
2023 PRC isn't capturing $8 per iphone 3g in assembly anymore. She captured $100 / 25% BOM since iPhoneX. Current trend of PRC+1 reshoring (derisking) is moving low end industries / labour to cheaper labour regions while PRC moves up intermediate goods and value chains. Hence why PRC exports to Mexico increase proportional to Mexico exports to the US. Mexico is finishing PRC intermediate goods to evade tariff. What we have seen is PRC becoming more and more indispensable and integrated throughout the global value chain.
Actual low end semi production is expanding massively in PRC. Medium end (12nm+) expansion is going to be mostly in PRC, because it's capturing market share in worlds biggest semi market that western fabs will increasingly lose due to export controls. What you're seeing is west strategic expansion of fabs that will lead to bloc overcapacity. Most of those fabs will only be viable via state subsidy. This isn't even going into capital goods / machinery that RoW are increasingly dependent on the PRC to try to re/industrialize at all. It's not what PRC makes but how much of everything that she makes that positions PRC to be indispensable trade partner for at least decades.
Repeating the demographic collapse narrative from Zeihan tier analysis is disingenuous. It's a manageable challenge / transition because PRC demographers aren't retarded, this is one area where they actually had a long term plan and are mostly meeting expectations. There's a reason PRC society has ~90% (87 urban / 96 rural) home ownership and some of the highest household savings rate. Old cohorts who saw QoL expand hundreds of times, simply do not have expectation of massive state welfare program, or increasingly being taken care of by kids. The entire dependency ratio / confucius obligation is orientalist projection that overlooks the fact that in aging countries like JP, old people just kind of rot and die unceremoniously. That’s where cultural expectations are currently trending, elderly don’t want to be filial drag on the next gen and are going to die quietly in their house with their nest egg. And what happens when they die? Up to 8 household wealth transfers to a couple who have increased consumption and family planning options. Will some families get fucked, of course, but you know which cohort will see large intergeneration wealth transfer dividend, the educated/skilled ones whose pushing PRC up the value chain.
Meanwhile PRC family planning prevented like 200m-300m excess births, when west is meming about PRC youth unemployment, which at 20% still means 80% of a very large number of skilled workers are being integrated into PRC economy. Much more than US integrates via immigration. It’s very difficult to make 6-8m new jobs for youth, especially high skilled every year. Nevermind double that. See PRC still has 600M farmers + low skilled workers stuck in the informal economy. They’re productivity drags. Reality is avoided adding another 200m-300m mouths that system wasn't scaled to deal with. Current TFR lower than planners want, but right now PRC is where roughly demographers were aiming and planning for.
PRC is also food self-sufficient in caloric terms. Agri imports mostly bulk animal feed and luxury items that don't undermine absolute food security. Not that it matters since she's shifting away from western agri to BR/RU/global south. And really this entire obsession with PRC food imports is dog whistle for PRC food insecurity, in which case, the US has exactly as much food and energy security as PRC because any disruption of PRC energy SLOC is going to be met with disruption of CONUS energy infra. Fortress America is over. PRC can starve US as much as she can starve PRC.
The entire idea that the PRC is unknowable is stupid. Incredible amounts of info on PRC is available via one of the largest western diaspora in the world. The problem is people choose to double down on the dumbest PRC collapse narratives from analysts with piss poor track records or outdated info that’s no longer relevant because US gov literally spending 100s of millions to seed disinfor about PRC while useful idiots wonder why PRC is not collapsing due to XYZ stupid reasons.
> I just can’t see the PRC and the CCP in its current form sticking around long enough.
I took an upper-level course from a China expert in 1989. At the time, a big question was exactly how long China's government could maintain national unity unity in the face of the many contradictory forces pulling at it. Turns out the answer was: longer than a lot of Westerners thought.
Is fragmenting into city states more likely than the CCP continuing to change, as it has over the past few decades?
Chinese cultural identity, centered around Han dominance and collectivism, has been a unifying force for quite some time. HK was a major exception because of British influence, but I have a hard time seeing the rest of the country willingly breaking up rather than just slowly forcing through change.
