Why China Is Not To Be Feared Published: 2022-08-02

The Rising China Myth

It's quite popular these days to assume that China will dominate the 21st century and eventually eclipse the United States economically.
There are many reasons why this view is completely without merit some of which I will explain here.

Demographic Collapse

It's well known that official Chinese statistics are, shall we say, worthy of skepticism. It's certainly in the Chinese Communist Party's interest to portray things as better than they actually are. After all, they not only have to convince the rest of the world that their economy is worthy of investment, they have to convince their own population.
The one-child policy that was in place for 36 years from 1980 to 2016 took a massive toll on the Chinese population, and there are signs that it may not recover. It turns out that both the official fertility rate and overall official population figures have been overstated for years. The Chinese government told the world last year that its population was 1.41 billion which turns out to have been an overstatement of about 130 million people. The fertility rate in China fell below replacement level in 1991 and continues to decline. In fact, projections now are for total Chinese population to be halved by the end of the 21st century if not sooner.

Energy Dependence

China's growth in recent decades has been fueled by cheap and abundant energy. They are now the world's largest importer of oil and natural gas. 75% of their oil and 45% of their natural gas is imported using figures from 2019. Most of their oil imports come from the Persian gulf region.
Energy is necessary for manufacturing and industry and transportation and distribution, but also most importantly for food production. China is now the world's largest importer of food as well. A number of policy mistakes and bad luck have conspired to bring down China's food self-sufficiency. Pollution, flooding, swine fever (you name it) have hit China hard in this area in recent years.

Military Inferiority

Yes, China has a lot of people albeit this number has been overstated for years (see above). But they are strategically landlocked and hemmed in by the United States and its allies. China now has the largest navy in the world in terms of its sheer number of hulls, but they have very limited range. Any conflict that takes place within 1000 miles of China's shores would see some Chinese resistance, but beyond that? The Chinese simply don't stand a chance.

Putting It All Together

There's much more to discuss on the subject of China's coming collapse that I won't discuss here including the lack of value add in Chinese manufacturing, rising labor costs, etc.
But the big takeaway from this article is that China's growth is dependent on food and energy, which they already have to import to cover shortfalls. This makes them highly dependent on the safety of the seas, which the US has guaranteed for the last 75 years or so since the end of World War 2. There is evidence that the era of the US sacrificing itself for the good of global trade is coming to an end. In fact, it can be argued that China's rise has only been possible because of the US's protection of ocean transport.

The Persian Gulf is a long way away and there is no way the Chinese can guarantee safe passage of their own oil imports. This threatens the stability of their current political system as hungry and unemployed people tend to overthrow governments.

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This article was written by: Anonymous
  • The author does not have a financial interest (stocks, options, other) in any companies mentioned in this article.
  • The author has indicated that this article is an original work. It expresses their opinions.
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