No Minister

China and its problems – two videos

with 7 comments

We hear the phrase about the 21st century being the Chinese Century that it can come as a bit of shock when this is not just questioned but attacked on it’s fundamental premises.

There are some negative projections of the nation that have not aged well, of which my well-thumbed copy of Gordon Chang’s, The Coming Collapse of China, published in 2001, is one. Like The Great Depression of 1990, Chang nailed a lot of China’s problems but extrapolated them too far. However, there have been many more books pushing equally silly boosterisms of China and they’re not looking too good either.

The current negative takes are not a shock to me because I’ve adhered to the phrase first coined by Mark Steyn (who takes a great interest in demographics) around 2005 that, “China will get old before it gets rich”.

However, there are always new surprises coming out about this and they’re explored in the following video from geopolitical analyst Peter Zeihan. You can find a bullet point synopsis of it at the Battleswarm blog, of which the following three points are worth quoting:

  • They were going shrink in half by 2100. “Then they realized that they had been overcounting people for some time.” Then new data moved the date moved up to 2070. And now they’re saying it will be 2050. “For that to be true, the Chinese would have overcounted the population by 100 million.” And all of those missing people are of childbearing age. Their population actually peaked 15 years ago.
  • Xi’s instituted a cult of personality, and silenced anyone capable of independent thought. “He knows that the country’s current economic model has failed. And he knows he can’t guarantee economic growth, and he knows he can’t keep the lights on, and he knows he can’t win a war with the Americans.”
  • Xi’s solution? “Naked, blatant, ultra nationalism. Ethnocentric ultranationalism of the Nazi style.”

I don’t agree with all his points (I’ve always thought Stratfor, his former employer, is over-rated) but they’re interesting, and the increasingly extreme nationalism has been noted by everybody.

This second video focuses on that nationalism, especially in how China’s approach to the outside world has changed so dramatically from the 2008 Beijing Olympic Gamers to today. One of the strangest aspects has been Chinese diplomats the world over, hurling insults at their host countries, from Brazil, Canada, France, India and (of course) the USA. This is the exact opposite of what diplomats are supposed to do.

The video thinks it knows why and it’s summed up in three words, “Wolf Warrior Diplomacy”, designed to stir up nationalism as a way to control internal security problems. At the end it refers to the demographic problem – but also makes references to two other problems I was not aware of:

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UPDATE

Based on comments, and as a balance to the above there’s also this book mentioned in the latter video, China: The bubble that never pops.

The Chinese economy appears destined for failure, the financial bubble forever in peril of popping, the real estate sector doomed to collapse, the factories fated for bankruptcy.

Banks drowning in bad loans. An urban landscape littered with ghost towns of empty property. Industrial zones stalked by zombie firms. Trade tariffs blocking the path to global markets.

And yet, against the odds and against expectations, growth continues, wealth rises, international influence expands. The coming collapse of China is always coming, never arriving.

There’s also an interview with him on this subject:

Written by Tom Hunter

April 21, 2022 at 6:39 pm

7 Responses

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  1. The Kissinger plan was to bring China into the “global community”, expose them to international trade and in turn they’d eventually become more liberal and democratic. In fact the opposite has happened . . . the elites in the West see how China rules thru an unelected coterie of self-appointed masterminds and wish they could so the same. The G H W “New World Order” Bush administration cut China a lot of slack during the 1989 Tienanmen Square crackdown because this plan was already well underway.

    China has been very smart too, capturing the captains of Western industry, media and entertainment who salivate at the prospect of getting into a market and a manufacturing base of a billion plus people. And they’ve captured the politicians too – the ones on the Left thru grift and ideology, and the ones on the Right thru grift alone.

    Porky Roebuck

    April 22, 2022 at 11:09 am

    • I think what you describe belongs more to the Clinton/GW world of the late 90’s/early 00’s.

      In 1972 Kissinger and Nixon were more focused on splitting Communist China away from the USSR; geo-political military rather than geo-political economic, as shown by the continuing lack of economic ties between China and the West for two more decades. About the only contact that was encouraged post Kissenger-Nixon were “cultural” links; artistic and sporting groups.

      Tom Hunter

      April 22, 2022 at 11:24 am

  2. Communist totalitarian states such as the Soviet Union, China, North Korea, Cuba etc tend to go in one of two directions: they grow because of their power, but eventually collapse under their own weight of incompetence and corruption, or they become trapped in stasis because of their pariah stasis.

    Libertarian democracies on the other hand, will last a long time before they collapse under their own weight of wealthy, lazy degeneracy.

    History always repeats because human nature never seems to change.

    John JohnO

    April 22, 2022 at 11:11 am

  3. Interesting, in 2006 George Friedman was predicting Chinas focus going internal in his book The Next 100 years. Have a look at what he says on China from 4.27; https://m.youtube.com/watch?v=zpAkT5YnpEA&t=267

    Paranormal

    April 22, 2022 at 11:56 am

    • Thanks for that. Will watch.

      In one of those videos there was also a mention of this book, China: The bubble that never pops.

      The Chinese economy appears destined for failure, the financial bubble forever in peril of popping, the real estate sector doomed to collapse, the factories fated for bankruptcy.

      Banks drowning in bad loans. An urban landscape littered with ghost towns of empty property. Industrial zones stalked by zombie firms. Trade tariffs blocking the path to global markets.

      And yet, against the odds and against expectations, growth continues, wealth rises, international influence expands. The coming collapse of China is always coming, never arriving.

      There’s also an interview with him, which I should probably add to the post…

      Tom Hunter

      April 22, 2022 at 12:08 pm

  4. Interesting, but it’s looking at the CCP / PRC from a western perspective through western eyes and unfortunately misses a lot. I read a lot of Prof Anne-Marie Brady’s work because she’s fluent in Mandarin, knows the culture and more specifically is an international expert on the CCP. Not many westerners study the CCP and the CCP hate her with a passion, so she must be doing pretty well. I also follow three different channels on YouTube that give me an insight to what’s generally happening inside the PRC.

    First of all there’s a factional war between Xi Jinping and Jiang Zemin’s faction with the loser, their immediate family, and main supporters, more than likely having a meeting with the executioners. Normally since Mao’s death and the demise of the Gang of Four, CCP factional fighting doesn’t involve much bloodshed if any. Losers are generally put into retirement in quiet areas and kept under close surveillance. If needs be they can end up in a camp and if they’re really out of line a fatal medical event can be arranged. But this war is brutal and wide ranging far beyond the Politburo and Central Committee where such fights usually take place. It’s impacting right across the PRC and all sectors of society.

    Jiang Zemin wasn’t Deng Xiaoping’s choice as General Secretary in 1989 (1989 – 2002) because Deng didn’t like or trust him. But Deng ended up having no choice in the matter because his choice was incumbent General Secretary Zhao Ziyang who had failed to deal sternly enough with the student demonstrations in Tiananmen Square, so Deng had to replace him on the spot and Jiang was the only suitable replacement. It was Deng who ordered the PLA-GF into the Square to remove the students.

    Deng knew Jiang was corrupt and he wasn’t a Princeling, which matters much in the senior Party hierarchy. A Princeling is one who’s father or grandfather was one of Mao’s comrades on the Long March and subsequent war against the Kuomintang and Japan. Deng was dead right because Jiang was and is as corrupt as they come. He ensured that his family received all the best positions that afforded the best income possibilities and they did.

    During his terms as General Secretary Jiang placed his faction members in as many senior and other positions as he could. Of course the faction members would install their own people in positions below them and so on. The faction was right across the CCP organisation from the national level to the city and local level. Jiang family members and favourites were able to get into the real estate, banking, and manufacturing businesses etc., right from the start as they were slowly privatised during Jiang’s terms and after because he controlled the following General Secretaries like Hu Jintao etc. So he and the faction made more money and expanded its fingers into the PLA.

    By the time Xi Jinping was elevated to the Politburo Standing Committee corruption was rife within the CCP and the PRC. The economy was doing very well though but the state wasn’t gathering the revenues it was due in taxation, duties and other levies, because of the corruption. There was a tremendous amount of smuggling and the biggest smuggling organisation was the PLA. The Generals were gaining a lot of wealth from this and bribes for promotions from officers. In 2015 one General was busted for corruption and they found US$3.2 billion in cash in various currencies in his house. They had to get several trucks from the nearest PLA-GF garrison to move the cash. That’s apart from all the artwork and other treasures he had. He was a very senior general.

    In 2012 Xi wasn’t the first choice for General Secretary, nor the second or third. He was a compromise choice when no clear winner could be agreed upon. He was thought to be malleable and Jiang Zemin believed that he would be easily controlled. How wrong he was. Shortly after he was made General Secretary and was sure of himself, Xi start his anti corruption drive. Most welcomed it, but then he started after the Jiang faction proper and following them the security services and the police and finally the PLA. He has been smart about it by going after their economic assets and strangling their income streams. The Evergreen Real Estate Development Group is a Jiang faction company. Last year they overreached and needed funding from the Chinese banks which hasn’t been a problem before. Their funding streams from those banks dried up overnight and they were in deep trouble. Other real estate companies and developers are in the same boat so the bottom has dropped out of Chinese real estate.

    Ali Baba owner Jack Ma has run foul of Xi because he’s tied in with the Jiang faction. Now he’s basically lost control of Ali Baba and toes Xi’s line. He’s got no choice because he’s got CCP cadres and security people all over his business and him. Xi made a ruling that all business in the PRC including foreign owned businesses are to have a CCP cell in each business and branch of the business. Also repatriating money from the PRC is now more difficult. As a result many foreign owned businesses are pulling out of the PRC and going elsewhere. India and Vietnam are benefitting. Panasonic for one has either gone or is going.

    Xi’s stop the COVID-19 at all costs policy is not popular and it’s resulting in many people starving because they are prevented from going out to get groceries. The current lockdown in Shanghai is a brutal example of it and people have had enough. They can’t even go out for medical treatment and one pregnant woman died on the street because she was physically prevented from entering a hospital at night when she went into premature labour. Baby didn’t survive either. There is also a disconnect between the national and local Party officials and it’s been suggested that in Shanghai this is deliberate to make Xi look bad before the 20th Party Conference in November 2022. This is where he is seeking approval for his third term as General Secretary, and it’s not guaranteed at all. Shanghai is Jiang Zemin’s stronghold.

    All of this factional between Xi’s and Jiang’s factions has damaged the PRC economy significantly, and caused much angst amongst the population. There is now high unemployment amongst the well educated middle class and they have no jobs to go too. Rental accommodation is becoming tight and expensive and there is no universal unemployment benefit as such. Many of the cities and local authorities are struggling financially and a small number are technically insolvent. Many are not employing new people which is unusual, so new university graduates have no jobs to go too. Many city and local authority workers are only being paid their base salary which is quite low. They take home pay was made up with bonuses and these aren’t being paid and many have been told to pay their last bonus back. In the northern part of the country, during the coldest part of winter, there were many power brown outs and blackouts because of a lack of coal for their coal fired power stations and the snows had arrived early. In the PRC all heating is electrical and cooking is by gas. Also peoples passports were required to be returned to the government and that hasn’t gone down well.

    All of this disruption and public annoyance leads to a grumpy population that starts grumbling and there’s been a bit of that going on in the various PRC social media sites. The censors have been working flat out. The CCP will be very concerned about this because it doesn’t want any social unrest at home. That means political agitation against it and it hates any opposition to it. So it will probably do something to divert the population’s attention from their woes and misery. I wouldn’t be surprised if it will be something nationalistic because a good dos of nationalism always seems to be a good diversion.

    The other thing about this is Xi’s journey back to Maoism. He and his father were victims of the Red Guards and re-education during the Mao’s Cultural Revolution. Maybe he sees a Maoist revolutionary style of government as one way of ridding the CCP of what he sees as trash and heathens. The thing about Xi is that he isn’t stupid and the way he out manoeuvred Jiang Zemin proves that. That’s what makes him dangerous and if he succeeds in gaining his third term he will be more dangerous. But he’s made many enemies in the last 10 years including the security forces such as the MSS and police, as well as the PLA, and that maybe to much of a hurdle for him to jump.

    Ngatimozart

    April 29, 2022 at 2:44 am

    • … they found US$3.2 billion in cash in various currencies in his house.

      A Billion? In cash? In one house? That seems a stretch.

      But your comment is fascinating. I don’t follow China’s internal politics that much, more a case of looking at her external factors, but I’m not unaware of the history of CCP factions.

      Having said that I’ve long argued that what we see in China is simply another version of their 3000 year-old culture of a vast, powerful, centralised, technocratic state that, while it rules, enables the people to live in peace and prosper.

      Until the next revolution! After which it’s warfare and a collapse into a semi-feudal state with constant civil wars great and small.

      To me the only question is the length of time it will take for this current dynasty to fall.

      Tom Hunter

      April 29, 2022 at 11:49 am


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