Difference between revisions of "Essay: Was December 2021 a pivotal moment in the future of global politics for decades to come?"

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China now has a struggling economy (See: [[Essay: It's time to be very bearish about China's long-term economy|It's time to be very bearish about China's long-term economy]] ]]
 
China now has a struggling economy (See: [[Essay: It's time to be very bearish about China's long-term economy|It's time to be very bearish about China's long-term economy]] ]]
[[File:Evergrande 1.png|thumbnail|center|800px|Source: [What are China Evergrande's default effects long-term?] ]]
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[[File:Evergrande 2.png|thumbnail|center|800px|Source: [What are China Evergrande's default effects long-term?] ]]
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[[File:Evergrande 2.png|thumbnail|center|800px]]
[[File:Evergrande 3.png|thumbnail|center|800px|Source: [What are China Evergrande's default effects long-term?] ]]
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[[File:Evergrande 3.png|thumbnail|center|800px]]
 
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[[File:China's long-term economic outlook weakens.jpg|thumbnail|center|1200px|China is no longer set to eclipse the US as the world’s biggest economy soon, and it may never consistently pull ahead to claim the top spot as the nation’s confidence slump becomes more entrenched.
 
[[File:China's long-term economic outlook weakens.jpg|thumbnail|center|1200px|China is no longer set to eclipse the US as the world’s biggest economy soon, and it may never consistently pull ahead to claim the top spot as the nation’s confidence slump becomes more entrenched.

Revision as of 18:58, March 16, 2025

The Chinese economy is the world's second largest economy.[1]

After China's real estate developer giant Evergrande defaulted on its offshore debt in December 2021, it sent shockwaves through the Chinese economy.[2]

The bursting of China's bubble economy began in earnest in December of 2021. Since 2021, China’s stock markets have lost about $7 trillion in value (See: Chinese stock markets).[3]

China now has a struggling economy (See: It's time to be very bearish about China's long-term economy
Evergrande 1.png
Evergrande 2.png
Evergrande 3.png
China is no longer set to eclipse the US as the world’s biggest economy soon, and it may never consistently pull ahead to claim the top spot as the nation’s confidence slump becomes more entrenched.

That’s according to Bloomberg Economics, which now forecasts it will take until the mid-2040s for China’s gross domestic product to exceed that of the US — and even then, it will happen by “only a small margin” before “falling back behind.”

Before the pandemic, they expected China to take and hold pole position as early as the start of next decade.[4]

See: Skepticism about China remaining a global power

In addition, please see:

*Chinese real estate crisis (2020–present)

*Chinese stock markets crisis (Since 2021, China’s stock markets have lost about $7 trillion in value.[5])

*Youth unemployment in China
Map of China

Question: Was December 2021 a pivotal moment in the future of global politics for decades to come?

Newsweek's 2024 article China's Economic Slump Wipes 155 Billionaires off Global Rich List reported "The signs of trouble for the Chinese economy have been flashing red since troubles for real estate giant Evergrande began in 2021."

On January 31, 2024 CNN reported concerning China's real estate crisis:

The liquidation of Evergrande as ordered by a court this week has raised more questions than answers about how the collapse of the poster child of China’s real estate crisis will affect investors, thousands of workers, and homebuyers waiting for their apartments

After the company defaulted on its offshore debt in December 2021, sending shockwaves through the world's second largest economy, the Chinese government has taken a leading role in guiding the company through a restructuring. The liquidation of Evergrande as ordered by a court this week has raised more questions than answers about how the collapse of the poster child of China’s real estate crisis will affect investors, thousands of workers, and homebuyers waiting for their apartments.[6]

China has been in the midst of a real estate crisis (See: China's real estate crisis). Since 2021, China’s stock markets have lost about $7 trillion in value (See: Chinese stock markets).[7] On February 17, 2024, the South China Morning Post reported that China’s young adults choose to be ‘full-time children’, paid by their parents to do chores amid record-high youth unemployment.[8][9] The Chinese phrase "full-time children" refers to young people who give up working and just live off their parents (See: Youth unemployment in China).[10][11]

On February 6, 2024, Yahoo Finance said concerning the Chinese real estate crisis:

China's overreliance on real estate has sent its economy tumbling toward 2008-era financial conditions, Kyle Bass told CNBC on Tuesday.

"This is just like the US financial crisis on steroids," the Hayman Capital founder said. "They have three and a half times more banking leverage than we did going into the crisis. And they've only been at this banking thing for a couple of decades."

The years of double-digit growth China enjoyed prior to the pandemic were made possible by an unregulated real estate market, Bass noted, which leaned too heavily on debt to expand.

With defaults now plaguing the industry, this spells massive trouble for the country's broader economy. The real estate sector makes up around a quarter of the country's GDP and 70% of household wealth.

"The basic architecture of the Chinese economy is broken," Bass summarized.[12]

Contents

China's economy, big problems - The Four Ds of debt, demand, demographics and decoupling (de-risking)

Xi Jinping is the current General Secretary of the Communist Party of China which requires that all their members be atheists.[13]

See: China and atheism and Atheism and communism

See also: It's time to be very bearish about China's long-term economy

The "Four Ds": These are referring to China's economic challenges are: Debt, Demand (China's domestic demand is struggling, with factors like a slowing economy and consumer confidence issues impacting spending), Demographics, and other countries decoupling from China (or De-risking), which are seen as potential drags on the Chinese economy.

Demand/deflation:

"The Chinese Authorities are now subsidizing Chinese businesses within China through trade in schemes however despite this prices on the shelves are continuing to fall. The economy experienced deflation in February and producer prices have now fallen in every month since October 2022. If this situation continues the Chinese Economy is at risk of imploding and will not hit the target GDP growth figure of 5.0% for 2025." CHINA's Internal Collapse, Video, March 2025

"After two decades of rapid expansion, China’s economy has seized up. Real growth has slowed dramatically, as reported by the World Bank and by the Rhodium Group (as opposed to Beijing’s official numbers, which are widely discounted). In current dollars, growth seems to have been negative from 2021-2023." - China’s Economic Problem Isn’t Just ‘Japanification’ – It May Be Worse, Forbes, February 2025

China's monetary policy and deflation: China's deflation: Made in the USA, March 2025 ("Over the past few decades, China’s currency has been either rigidly fixed to the US dollar (1995-2005 and 2008-2010), or kept within a narrow band around the US dollar.... But as a general rule, a strong US dollar means tight money for any country with its currency pegged to the dollar, or even kept relatively stable against the dollar."[1] On the other hand, "China pegged its currency from 1997 to 2005 to the U.S. dollar but since has managed its currency against a basket of currencies. The effect of the peg and the low currency is that Chinese exports are cheaper and, therefore, more attractive compared to those of other nations.[2] ). "Monetary policy plays a crucial role in combating deflation, a situation where prices and wages decline, by using tools like lowering interest rates and increasing the money supply to stimulate economic activity and raise prices."[3]

Debt:

  • China - In 2019, China's total government debt to GDP, which includes national/local debt, was estimated to be over 300% and local governments' debt is a major contributor to this total.[14] However, many financial analysts believe that China inflates its GDP. The January 23, 2024 South China Morning Post article China claims ‘biggest corruption in statistical sphere’ amid fake data crackdown indicates: "The accuracy of China's economic data has long been questioned, as many feel there is a gap between reality on the ground and the official figures, and Beijing has intensified efforts to crack down on data fraud in recent years amid efforts to dispel doubts." 90.1% national debt to GDP ratio.

Demographics:

Decoupling/De-risking:

  • Donald Trump's tariffs on China, 2025 (As of March 2025): 20% tariff on China imports and stacking on top of tariffs of up to 25% imposed on Chinese imports during Trump's first term.

In 2024, China's exports grew by 5.9% to USD 3.58 trillion, with the ASEAN region being the largest destination, followed by the European Union.

  • ASEAN Region: "Trump’s initial tenure was marked by an aggressive trade war with China, severely disrupting global supply chains and creating economic ripples throughout Southeast Asia. The potential for renewed economic hostilities in 2025 poses a threat to ASEAN’s economic stability, which is deeply intertwined with both the U.S. and Chinese markets." - ASEAN’s Response To Trump 2.0: An Analysis Of Problems And Challenges, 2025

The writing is on the economic wall: China's economy has peaked and is now declining

See also: It's time to be very bearish about China's long-term economy

The flag of China

The January 23, 2024 South China Morning Post article China claims ‘biggest corruption in statistical sphere’ amid fake data crackdown indicates: "The accuracy of China's economic data has long been questioned, as many feel there is a gap between reality on the ground and the official figures, and Beijing has intensified efforts to crack down on data fraud in recent years amid efforts to dispel doubts."

With the above in mind, as can be seen by the below articles and videos, there is an abundant amount of evidence indicating that China's economy has likely peaked.

China has peaked arguments and is now in decline arguments

The January 23, 2024 South China Morning Post article China claims ‘biggest corruption in statistical sphere’ amid fake data crackdown indicates: "The accuracy of China's economic data has long been questioned, as many feel there is a gap between reality on the ground and the official figures, and Beijing has intensified efforts to crack down on data fraud in recent years amid efforts to dispel doubts."

With the above in mind, as can be seen by the below articles and videos, there is an abundant amount of evidence indicating that China's economy has likely peaked.

Articles:

  • China’s rise is reversing, Financial Times, November 20, 2023 (The past two years have seen the largest drop in the China’s share of global GDP since the Mao era)

Videos:

China's high youth unemployment

USA vs. China: Innovation and labor productivity per capita

Per capita USA is more innovative than China, but China has more people so total innovative output is higher. But China's economy and demographics are in SAD SHAPE so its economy will crash and burn in about a decade. Also, in terms of labor productivity per capita and GNP per capita, the USA still leads China! USA! USA! USA!

See:

Life is a marathon and not a sprint. See: Slow and steady growth over the long term via capitalism and the rule of law versus short-sighted authoritarian economic growth that is costly to the long term economy and How long will the American civilization last? Strong reasons it could be a very long time

The fragility of an economy run by communists that has the cult of personality surrounding Xi Jinping

See also: Is there anything more fragile than an economy run by communists - especially one that has the cult of personality surrounding Xi Jinping?

"The underpinnings of China’s growth seem fragile from historical and analytical perspectives. Even if no crises materialize, unfavorable demographics, high debt levels, and an inefficient financial system will constrain China’s growth."[15]

Is there anything more fragile than an economy run by communists - especially one that has the cult of personality surrounding Xi Jinping?

Question: Are Chinese vases less fragile than Xi Jinping's inept leadership?



Authoritarian regimes, like China, are strong (Various means to repress population and/or to limit other political options), but at the same time they are brittle. The former Soviet Union is an example of this principle.

In modern history, corrupt, one-party regimes are not known for their great longevity such as lasting over 100 years and China has one-party rule - namely the Chinese Communist Party.[16] Mint News reported that "Chinese President Xi Jinping is expressing concerns about the potential collapse of the Communist Party of China (CCP) as millions worldwide are renouncing their affiliation with the party."[17]

The Chinese Communist Party could lose power if China continues its downward path in terms of economic strength (See: Scenario of a collapse of the CCP, Taipei Times, 2023).

We live in a bipolar world where the second leading power China is financially struggling

See also: The myth of multipolarity. What do the terms unipolar, bipolar and multipolar mean as far as international relations?

The United States will likely be the strongest country for the foreseeable future and this is due to the strengths of the USA and partly due to the weaknesses of China and Russia.

See: The United States will be the leading power in the world for the foreseeable future

As far as the field of international relations, the education website Unacademy.com defines a unipolar world thusly, "A unipolar world is when the majority of the world is dominated by a single state or nation's military and economic power, and social and cultural influence." A bipolar world is when two countries are global superpowers. And a multipolar world is when three or more countries have major influence over the world.

In his February 22, 2024 article Tipped Power Balance: China’s Peak and the U.S. Resilience, Yanzhong Huang wrote concerning China's waning economic power: "China's decline in economy and influence might indicate its unlikeliness to displace the United States as a leading global power in the foreseeable future. This development calls for a reevaluation of the U.S. policy towards China."[18]

A strong case can be made that we live in a bipolar world, where the second leading power is economically struggling.

Previously, I wrote the related essays:

The material below argues that the world is not presently multipolar.


"The United States and China are undoubtedly the two most powerful countries, but at least one more country must be roughly in their league for multipolarity to exist. This is where claims of multipolarity fall apart. Every country that could plausibly rank third—France, Germany, India, Japan, Russia, the United Kingdom—is in no way a rough peer of the United States or China." -The Myth of Multipolarity, American Power’s Staying Power, Foreign Affairs, 2023

However, a number of leading geopolitical analysts are skeptical about China remaining a global power as it faces a number of serious intractable problems (See: Skepticism about China remaining a global power).

I do agree with Donald Trump that America should not get into "endless wars" that do not serve America's vital interests.[19] I also agree with Trump's policy of not using the American military to "solve ancient conflicts in faraway lands".[20]
Chart of the growth of U.S. GNP from January 1947 to January 2023.

A great strength of the United States is its very consistent growth of its GNP over decades and its quick recovery the few times its GNP has gone down.[21]

In addition, research indicates that in the long-term, non-authoritarian countries are more likely to experience greater economic growth. See: Time Under Authoritarian Rule and Economic Growth, CORI Working Paper No. 2007-02

For more information on this topic, please see:

*Should You Be Bullish on America?

Why is America so rich?

*Size of a working age population in a country and its correlation with national GNP in advanced economies. The ability of the United States to attract some of the best and brightest workers in the world

*Slow and steady growth over the long term via capitalism and the rule of law versus short-sighted authoritarian economic growth that is costly to the long term economy
Investopedia says about the importance of labor productivity to an economy, "Labor productivity is largely driven by investment in capital, technological progress, and human capital development. Labor productivity is directly linked to improved standards of living in the form of higher consumption."[22]

According to Yahoo Finance: "According to Yahoo Finance: "Efficiency in production, also coined as productivity, is one of the major driving forces behind economic resilience in a country... The United States has one of the strongest economies in the world. The country hosts some of the largest companies in the world, which contributes to the high GDP per capita in the country."[23]

As can be seen in the map above, the USA has one of the highest labor productivity rates in the world and it is significantly higher than both China and Russia.[24]

See: Essay: The USA has one of the highest labor productivity rates in the world - significantly higher than both China and Russia
Switzerland, Sweden, the United States, the United Kingdom and Singapore are the world’s most innovative economies in 2023, according to WIPO’s Global Innovation Index (GII), as a group of middle-income economies have emerged over the past decade as the fastest climbers of the ranking.[25][26][27]
The USA was among the most 10 most diverse economies in 2018 according to the Word Atlas website.[28]

Read the articles: The Importance Of A Diversified Economy and Resilient, stable, sustainable: The benefits of economic diversification
In August of 2023, the USA was outproducing Russia and Saudi Arabia in oil production.[29]. The best is yet to come![30][31]

The U.S. Energy Information System reported in 2023: "Strong continuing international demand for petroleum and other liquids will sustain U.S. production above 2022 levels through 2050, according to most of the cases we examined in our Annual Energy Outlook 2023 (AEO2023). We project that the United States will continue to be an integral part of global oil markets and a significant source of supply in these cases, as increased exports of finished products support U.S. production."[32]

For more information, please see: The USA is outproducing Russia and Saudi Arabia in oil production. The best is yet to come

Chinese economy if Trump is elected in 2024 and raises tariffs on Chinese imports up to as much as 60%

In 2023, China's exports made up around 18.9% of its gross domestic product (GDP).

According to World's Top Exports, the United States is one of China's top trading partners, accounting for 14.8% of China's total exports in 2023.

If USA starts decoupling from China, it could spur other countries to as well (Like a contagion). Plus, it would give other countries more bargaining power.

China's economy is already showing "economic cracks".

Video: Chinese economy if Trump is elected in 2024 and raises tariffs on Chinese imports up to as much as 60% ?

John Joseph Mearsheimer and U.S. relations with China and Russia

The flag of Russia

In his 2023 interview the South China Post, Professor John Joseph Mearsheimer stated about U.S. relations with China and Russia:

The Americans have a vested interest in pivoting full force to East Asia, to contain China. The Americans view China as a more serious threat than Russia. It’s very important to understand that China is a peer competitor to the United States. China is a rising great power and is a threat to the US in ways that Russia is not. So the Americans have a vested interest in not getting bogged down in a war in eastern Europe, more specifically in Ukraine.

Furthermore, they have a vested interest in doing everything they can to make sure that Russia and China are not close allies. What happens as a result of the Ukraine war is that it’s almost impossible for the US to fully pivot in Asia.[33]

In his March 2022 interview with The New Yorker, Mearsheimer indicated:

I’m talking about the raw-power potential of Russia—the amount of economic might it has. Military might is built on economic might. You need an economic foundation to build a really powerful military. To go out and conquer countries like Ukraine and the Baltic states and to re-create the former Soviet Union or re-create the former Soviet Empire in Eastern Europe would require a massive army, and that would require an economic foundation that contemporary Russia does not come close to having. There is no reason to fear that Russia is going to be a regional hegemony in Europe. Russia is not a serious threat to the United States. We do face a serious threat in the international system. We face a peer competitor. And that’s China. Our policy in Eastern Europe is undermining our ability to deal with the most dangerous threat that we face today.[34]

The historian Stephen Kotkin calls the notion of a multipolar world "nonsense"

Stephen Kotkin is an American historian, academic, and author. Kotkin's most prominent book project is his three-volume biography of Joseph Stalin.

Kotkin calls the notion of multipolar world "nonsense".[35]

Will Russia become a failed state within 10 years? Is Russia currently a failed state? Will Russia eventually become a failed state?

C. Mojan Raja, Director of the Institute of South Asian Studies at the National University of Singapore, on the myth of a multipolar world

C. Mojan Raja, the Director of the Institute of South Asian Studies at the National University of Singapore wrote about the myth of the multipolar world: "the myth of multipolarity endures in Indian foreign policy discourse even as a bipolar world takes shape. While official Delhi is nimbly adapting to the realities of a bipolar world, the Indian foreign policy discourse continues to be tied down by multipolar confusion."[36]

International Relations Analyst Mark Sleboda on Brian Berlectic's pro-Russia New Atlas YouTube channel indicates that "We are not in a multipolar world."

"We are not in a multipolar world." - International Relations and Security Analyst Mark Sleboda on Brian Berlectic's pro-Russia New Atlas YouTube channel.[37]

Business is more powerful than military might. All REAL Americans know this!

See: Business is more powerful than military might. All REAL Americans know this!

Why I am not bullish on Russia's future

Map of Russia. Approximately 7% of Russia's land is arable and suitable for agricultural production.

See also: Why I am not bullish on Russia's future

For multiple reasons, I am not bullish on Russia's future. See: Why I am not bullish on Russia's future

One of the reasons is that Russia has too many eggs in the sell oil and gas to the China basket (See: Russian oil: Lower future production/profits due to future higher extraction costs and other inefficiencies).

There are definite signs that China's economy faces a decline in the future (See: Skepticism about China remaining a global power).

Over time, Chinese Economic Decline is Russia’s Decline:

Before the outbreak of Russia's invasion of Ukraine, China promised to back Russia “eternally”. However, China’s economy is now in decline – and it might take Russia down with it. China is facing a variety of factors that are strangling it: Youth unemployment of over 20%, more citizens seeking to leave, and a debt situation that has grown out of control.[38]

Key point:

Russian demography has long been an existential issue to Vladimir Putin. In 2021, he declared “saving the people of Russia is our top national priority".[39]

Given China's major problems, it is just a matter of time before they surface to a greater and greater degree. So the question is not if China faces big economic problems, but when. And when that day arrives, Russia's economy and gas and oil profits will be BADLY damaged when China's economy declines. Right now, Russia is focusing on their war economy due to the war in Ukraine. So the important work of diversifying its economy is not occurring to the extent it should.

Furthermore, the war in Ukraine is making Russia's demographic crisis worse as can be seen by the resources given below so it will have less labor and less brain power to solve this problem.

War in Ukraine causing Russia's demographic crisis worse:

Russia is experiencing a brain drain:

General international politics essays

Essays about the United States

The flag of the United States

Essays about China

Essays about Russia

Essays about Israel

Essays about the war in Ukraine

See also

External links

The bald eagle has been the national bird of the United States since 1782.[40]

Bald eagles, like other eagles worldwide, are seen as symbols of strength, courage, and freedom. And, unlike other eagles, the bald eagle is indigenous only to North America.[41]

China related:

Additional resource:

References

  1. The Top 25 Economies in the World, Investopedia
  2. this the end of Evergrande? Here’s what may happen next, CNN, 2024
  3. What’s going on with China’s stock market?, MarketPlace.org
  4. China Slowdown Means It May Never Overtake US Economy, Forecast Shows, Bloomberg News, September 5, 2023
  5. What’s going on with China’s stock market?, MarketPlace.org
  6. this the end of Evergrande? Here’s what may happen next, CNN, 2024
  7. What’s going on with China’s stock market?, MarketPlace.org
  8. China’s young adults choose to be ‘full-time children’, paid by their parents to do chores amid record-high youth unemployment, South China Morning Post, February 17, 2024
  9. China’s ‘full-time’ children, video
  10. China’s young adults choose to be ‘full-time children’, paid by their parents to do chores amid record-high youth unemployment, South China Morning Post, February 17, 2024
  11. China’s ‘full-time’ children, video
  12. China is facing the US financial crisis 'on steroids' as the real estate market collapses, famed hedge fund boss says, Yahoo Finance, February 6, 2024
  13. China’s Communist Party Reaffirms Marxism, Maoism, Atheism, New American, 2014
  14. China's debt tops 300% of GDP, now 15% of global total, Business Standard, 2019
  15. China Stumbles, but it is Unlikely to Fall by Eswar S. Prasad, December 2023
  16. China's Communist Party is at a fatal age for one-party regimes. How much longer can it survive?, Australian Broadcasting Corporation, 2020
  17. Xi Jinping raises concerns over potential collapse of Chinese Communist Party: Report, Mint News, 2023
  18. Tipped Power Balance: China’s Peak and the U.S. Resilience by Yanzhong Huang, Council on Foreign Relations website, February 22, 2024
  19. Trump to West Point grads: 'We are ending the era of endless wars', Reuters, June 13, 2022
  20. Trump to West Point grads: 'We are ending the era of endless wars', Reuters, June 13, 2022
  21. Should You Be Bullish on America?
  22. Labor Productivity: What It Is, How to Calculate & Improve It, Investopedia
  23. 25 Most Productive Countries Per Capita, Yahoo Finance
  24. Most Productive Countries 2024
  25. The U.S. Is (Again) Among the World's Top Innovators, U.S. News and World Report, 2023
  26. Global Innovation Index 2023: Switzerland, Sweden and the U.S. lead the Global Innovation Ranking; Innovation Robust but Startup Funding Increasingly Uncertain
  27. World's Most Innovative Countries, Statista website, 2023
  28. Countries With The Most Diverse Economies
  29. US Oil Production Hits Records
  30. Donald Trump promises to drill for oil, close southern border on first day as president
  31. The Oil And Gas Workers’ Association Endorses Trump For 2024 Vote
  32. U.S. production of petroleum and other liquids to be driven by international demand
  33. The West needs to prepare for ‘ugly’ Russian victory in Ukraine, which will reward China, leading US political scientist warns, South China Morning Post
  34. Why John Mearsheimer Blames the U.S. for the Crisis in Ukraine, The New Yorker, March 2022
  35. Why the West Won’t Collapse with Stephen Kotkin
  36. C Raja Mohan writes: India at G7 — myth of multipolarity, Indian Express, 2023
  37. The New Atlas LIVE: Mark Sleboda on West Pivots to "Long War" in Ukraine, Industry to Decide Victor, Mark Sleboda at around the 2 hour and 6 minute point in the video
  38. Chinese Economic Collapse is Russia’s Downfall, Interview with Volodymyr Ludovskyy PhD, Professor of Economics, Indiana University, 9-12-2023
  39. Russia’s population is in a historic decline as emigration, war and a plunging birth rate form a ‘perfect storm’, Fortune magazine, 2022
  40. The American Bald Eagle
  41. The American Bald Eagle