Difference between revisions of "Essay:Skepticism about China remaining a global power"

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In 2023, China’s economy faces [https://www.nytimes.com/2023/01/02/business/china-economy-covid.html a perilous road] to recovery. The country also has a [https://markets.businessinsider.com/news/bonds/china-debt-crisis-lgfv-bonds-xi-jinping-communist-party-congress-2022-10 local debt crisis] and [https://www.grid.news/story/global/2022/08/29/chinas-mortgage-boycotts-why-hundreds-of-thousands-of-people-are-saying-they-wont-pay/ real estate crisis]. And its capricious autocratic leadership is causing more people to say that [https://www.funds-europe.com/july-august-2022/china-roundtable-has-china-become-uninvestable China is uninvestible].  
 
In 2023, China’s economy faces [https://www.nytimes.com/2023/01/02/business/china-economy-covid.html a perilous road] to recovery. The country also has a [https://markets.businessinsider.com/news/bonds/china-debt-crisis-lgfv-bonds-xi-jinping-communist-party-congress-2022-10 local debt crisis] and [https://www.grid.news/story/global/2022/08/29/chinas-mortgage-boycotts-why-hundreds-of-thousands-of-people-are-saying-they-wont-pay/ real estate crisis]. And its capricious autocratic leadership is causing more people to say that [https://www.funds-europe.com/july-august-2022/china-roundtable-has-china-become-uninvestable China is uninvestible].  
 +
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The ''South Morning China Post'' indicates in their 2024 article ''China’s three-legged race to fend off the 4 Ds of an economic apocalypse'': "And the race is on as policymakers grapple with the ramifications of four distressing “Ds” – debt, deflation, de-risking and demographics – that continue to bog down the 126-trillion-yuan (US$17.67 trillion) economy at the starting blocks of 2024 (De-risking refers to businesses terminating/reducing their business relationship with China in favor of doing business with other countries.)."<ref>[https://archive.ph/6Ehvq#selection-44777.12-44777.100 ''China’s three-legged race to fend off the 4 Ds of an economic apocalypse''], ''South Morning China Post'', January 2024</ref>
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On April 15, 2024, the Yahoo Finance article entitled ''Why China's economy is in BIG trouble'' indicated:
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{{Cquote|Fast-forward to 2024 and growth has stalled. The economy has suffered everything from a property slump to enormous public debt and high youth unemployment. And given China's rapidly ageing population and other factors such an increased trade protectionism abroad, its long-term economic prospects seem pretty grim.
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China's economy has suffered the 'Five Crises' of employment, exports, private investment, real estate, and debt defaults, according to Tapei expert Wu Jialong.
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In terms of challenges, the economy will have to contend with the 'Four Ds', says economist Zongyuan Zoe Liu. These are debt, demand, demographics, and decoupling (from trading partners).<ref>[https://uk.finance.yahoo.com/news/why-chinas-economy-big-trouble-114800090.html?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAAENX0VbIjdEzQJIe19QDN4l2U8TUWN3_ksXEPPpOfTtbY5yPNkNiDx12xMv9eFhpiOhyl9JSs54oqyBP2G8KgnmUS9T-XSxmIA4ZezRhp_Z0qhNJNaNh_EC6RcuIpEWXp_JonGK0MMoWMB3iJucROzd6nNY1R2g9-_pNmGKs3EEB ''Why China's economy is in BIG trouble'', Yahoo Finance, April 15, 2024</ref>}}
  
 
'''5.''' Too many inefficient state-owned enterprises
 
'''5.''' Too many inefficient state-owned enterprises

Revision as of 13:09, April 16, 2024

The flag of China.

China faces a number of serious intractable problems. A number of leading geopolitical/economic analysts are pessimistic about China's remaining a global power and that China has peaked economically and/or will decline economically.

On December 22, 2022, Foreign Affairs magazine noted in their article China’s Dangerous Decline "...China is teetering on the edge of a cliff. Ten years of Xi’s “reforms” — widely characterized in the West as successful power plays—have made the country frail and brittle, exacerbating its underlying problems while giving rise to new ones. ...a growing number of Western analysts—including Michael Beckley, Jude Blanchette, Hal Brands, Robert Kaplan, Susan Shirk, and Fareed Zakaria—have begun to highlight this reality..."[1]

Colonel Douglas MacGregor said about China: "China has huge problems just holding itself together. So I think we should set China aside and understand that."[2]

The chance that that China's GDP will one day overtake that of the US is declining

See: The chance that that China's GDP will one day overtake that of the US is declining

China's weaknesses

China banned Winnie-the-Pooh because of the similarities between Winnie-the-Pooh and Xi Jinping.

Xi Jinping is obese. See also: Atheism and obesity

1. Bad government. The Chinese communists are godless, corrupt, short-sighted and authoritarian (See: Chinese Communist Party). A cult of personality has developed around Xi Jinping and he has eliminated all significant political opposition so now he is surrounded by yes man. So the government is calcified around Xi Jinping's thoughts and less responsive to citizens' concerns and problems. See: Chinese Communist Party and The rising rule of communist idiocracy in China and Militant atheism and China and atheism and Atheism and morality and Atheism and leadership

Corruption is so widespread in China that Wikipedia, an online encyclopedia founded by an atheist and agnostic, has an article entitled "Corruption in China".[3] On October 20, 2019, Wikipedia's Corruption in China article indicated, "Corruption in China post-1949 refers to the abuse of political power for private ends typically by members of the Chinese Communist Party, who hold the majority of power in the People's Republic of China."[4]

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.[5] 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."[6]

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

In addition, please see: Xi Jinping And The Challenge of Chinese Leadership by Peter Zeihan.

Also, please read: Xi Jinping Is Trying to Adapt to Failure, Foreign Policy, 2023

Videos:

2. China has terrible age demographics. It has the fastest graying/aging population in the world (See: Peter Zeihan's demography series) which will severely hurt its economy (See: Atheism and fertility rates). According to Forbes magazine, as far as the fertility rate of China: "...the Total Fertility Rate (births per woman) dropped in 2021 to just 1.15, far below the 2.1 required for a stable population."[7] In 2022, the historian Niall Ferguson indicated that China's population is projected to drop by 50-75% by the end of the century.[8]

3. A high percentage of uneducated people. The Stanford Center on China's Economy and Institutions article Invisible China: Hundreds of Millions of Rural Underemployed May Slow China’s Growth indicates: "The share of uneducated workers in China's labor force is larger than that of virtually all middle-income countries. According to census data, there are roughly 500 million people in China between the ages of 18 and 65 without a high school degree."[9]

Investopedia indicates: "Education tends to raise productivity and creativity, as well as stimulate entrepreneurship and technological breakthroughs. All of these factors lead to greater output and economic growth."[10]

Michael Beckley is an associate professor of political science at Tufts University and a Jeane Kirkpatrick Visiting Scholar at the American Enterprise Institute Beckley published the 2018 book Unrivaled: Why America Will Remain the World's Sole Superpower.

A Rand Corporation review of Beckley's book Unrivaled: Why America Will Remain the World's Sole Superpower indicates:

“ Beckley adduces an impressive amount and diversity of evidence in support of his argument. U.S. workers, for example, “generate roughly seven times the output of Chinese workers on average.” China's total factor productivity growth rate, meanwhile, “has actually turned negative in recent years, meaning that China is producing less output per unit of input each year,” and “roughly one-third of China's industrial production [goes] to waste.”[11] ”

For more information, please see: China has a labor productivity rate that is a WHOLE LOT LOWER than the labor productivity rate of the USA

Map of China

4. Financial soundness lacking in society. In September of 2023, Reuters reported: "China’s debt-to-GDP ratio has doubled to a whopping 280%, opens new tab, with the bulk of liabilities held by local government financial vehicles (LGFVs)."[12] China also has a real estate crises of a great magnitude. In addition, it has an opaque accounting system. While it is true that China has more tools than the West to address the matter of its debt crisis, too much debt is a drag on an economy no matter how the burden is distributed by its government.

After China's real estate developer giant Evergrande defaulted on its offshore debt in December 2021, it sent shockwaves through the Chinese economy.[13]

On February 6, 2023, Yahoo Finance said concerning China's real estate crisis which began in 2020:

“ 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.[14]

”

Since 2021, China’s stock markets have lost about $7 trillion in value.[15] See: Chinese stock markets

China has high youth unemployment (See: Youth unemployment in China).

In 2021, the geopolitical analyst Peter Zeihan noted that capital flight out of China was at a record high and exceeded 1 trillion dollars a year.[16]

In 2023, China’s economy faces a perilous road to recovery. The country also has a local debt crisis and real estate crisis. And its capricious autocratic leadership is causing more people to say that China is uninvestible.

The South Morning China Post indicates in their 2024 article China’s three-legged race to fend off the 4 Ds of an economic apocalypse: "And the race is on as policymakers grapple with the ramifications of four distressing “Ds” – debt, deflation, de-risking and demographics – that continue to bog down the 126-trillion-yuan (US$17.67 trillion) economy at the starting blocks of 2024 (De-risking refers to businesses terminating/reducing their business relationship with China in favor of doing business with other countries.)."[17]

On April 15, 2024, the Yahoo Finance article entitled Why China's economy is in BIG trouble indicated:

“ Fast-forward to 2024 and growth has stalled. The economy has suffered everything from a property slump to enormous public debt and high youth unemployment. And given China's rapidly ageing population and other factors such an increased trade protectionism abroad, its long-term economic prospects seem pretty grim.

China's economy has suffered the 'Five Crises' of employment, exports, private investment, real estate, and debt defaults, according to Tapei expert Wu Jialong.

In terms of challenges, the economy will have to contend with the 'Four Ds', says economist Zongyuan Zoe Liu. These are debt, demand, demographics, and decoupling (from trading partners).[18]

”

5. Too many inefficient state-owned enterprises

6. In addition to having a greying population with a subreplacement level of fertility, it has poor prospects to attract new people due to its repressive, surveillance/police state society. In addition, it has a population that does not like foreigners which makes immigration more difficult.

7. Besides having a poor reputation to its repressive society, it's starting to have a bad international reputation due to: debt trap projects to poor nations; wolf-warrior, aggressive foreign policy; human rights violations, unfair trade practices and intellectual property theft.

8. China is experiencing a brain drain and more people are fleeing China (See: China’s Brain Drain Threatens Its Future, Wall Street Journal, 2023 and As economy falters, more Chinese migrants take a perilous journey to the US border to seek asylum, Yahoo News, 2023

9. China appears to be stuck in the middle-income trap.

China has likely peaked and is now in decline arguments

Map of China
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.[19]

China has likely peaked 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 major economic crisis are signs of major deflationary pressures

According to Investopedia, "Deflation is not normally bad for an economy, except when it occurs in reaction to previous over-inflation."[20] Unfortunately for China, it has economic bubbles that are bursting in relation to its real estate and stock markets which is causing much economic hardship to many Chinese. Both of these markets had values that were highly inflated relative to their actual economic value. The Empower website notes that deflation "can lead consumers to spend less now, in part because they expect prices to continue to fall; it can push businesses to lower wages or lay off employees to maintain profit levels; and it makes existing debt more expensive for many borrowers.[21]

Presently, communist China is facing multiple crisis with the three major crisis below being signs of growing deflationary pressures on their economy:

Why China's likely prolonged economic malaise will probably be much worse than Japan's lost decades

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

Japan suffered 30 years of economic mailaise. See: Japan's lost decades - 1990s to 2010s

And while Japan's long financial malaise was bad, China's will be much worse (See: Japan's Recession Was Bad. China's Will Be So Much Worse)

The company China Beige Book International describes its company thusly:

“ Reliable data on China’s economy are notoriously difficult to come by. Official Chinese government figures exist, but lack transparency and credibility, while the few private indicators that exist are far too limited in size and scope for strategic planning.

We founded China Beige Book International in 2010 to help institutional investors and corporate CEOs navigate China’s notoriously black box economy. Today we operate the largest private in-country data-collection network ever developed to track the Chinese marketplace, gathering real-time economic data from thousands of firms across all of China’s regions, sectors, and 34 discrete industries.

Our flagship platform provides independent data and in-depth analysis on every key component of China’s diverse economy—from growth dynamics to labor market and inflation trends to the world’s only tracker of the credit environment and shadow banking.[23]

”

Recently there have been many sensationalist doom and gloom forecast about China's future economic prospects. On the other hand, China's Beige Book International has been very judicious and measured in its economic forecasts. The company previously argued that China's economy hasn't peaked, but now it no longer argues this.

In October 2023, Leland Miller, who is the CEO of China Beige Book International, now argues that we are in a new paradigm about China's future economy due to structural problems and "Right now we are in a period where everything is looking pretty bad."[24]

Japan experienced economic malaise from the 1990s to 2010s (see: Japan's lost decades - 1990s to 2010s).

On October 19, 2023, Reuters reported:

“ China’s real estate market is in decline. Debt deflation hangs in the air. The country’s workforce is shrinking and GDP growth is trending downwards. No wonder the International Monetary Fund at its recent shindig in Marrakech warned of slowing economic growth in the People’s Republic, raising the prospect of “Japanisation” – the prolonged economic and financial malaise that afflicted its once high-flying neighbour after an asset bubble imploded three decades ago. The trouble is that China’s economic imbalances are far worse than Japan’s in 1990. And that’s before considering the ruinous economic consequences of President Xi Jinping’s autocratic rule.[25] ”

And while Japan's long financial malaise was bad, China's will be much worse (See: Japan's Recession Was Bad. China's Will Be So Much Worse).

How long will China's one party, communist state last?

China's decline and its effect on global desecularization

See also: Desecularization and Growth of global desecularization and Acceleration of 21st century desecularization and Causes of desecularization and Global atheism statistics

China has state atheism and the fall of the Chinese Communist Party due to economic and other societal problems would cause a large drop in the global atheist population (See: Future of atheism in China and East Asia and global desecularization and China and atheism and Collapse of atheism in the former Soviet Union and Atheism and leadership).

In some regions where the secular left has considerable influence, they are losing an increasing amount of their power (See: Decline of the secular left).

China and human rights violations

See also: Atheism and human rights violations

Atheistic, Chinese communism and torture

According to a 2012 Worldwide Independent Network/Gallup International Association (WIN/GIA) poll, 47% of Chinese people were convinced atheists, and a further 30% were not religious. In comparison, only 14% considered themselves to be religious.[26] See: China and atheism

The Chinese communist regime has used beatings, harassment and torture to suppress religion in China and continues to use these practices.[27]

Atheistic China, political prisoners and forced labor in prisons

See also: Atheism and repressive prisons and Atheism and forced labor and Atheism and communism

In 2016, the International Business Times reported: "A senior Chinese advisor on religious affairs has said the country should promote atheism throughout society, in remarks that appear to reflect a deepening campaign to reinforce traditional Marxist values in China — and could add to concern about official attitudes among believers in the country’s five officially recognized religions."[28]

According to CNN, hundreds (or perhaps thousands) of labor camps and forced labor prisons (called laogai) still exist in modern China.[29] The prisons house political prisoners and dissidents alongside dangerous criminals.

The Chinese government run media outlet Xinhua reported in early 2013 that the country plans to reform its "controversial re-education through labor system this year."[30]

See also:

Atheistic China, political prisoners and forced labor in prisons

See also: Atheism and repressive prisons and Atheism and forced labor and Atheism and communism

According to CNN, hundreds (or perhaps thousands) of labor camps and forced labor prisons (called laogai) still exist in modern China.[31] The prisons house political prisoners and dissidents alongside dangerous criminals.

The Chinese government run media outlet Xinhua reported in early 2013 that the country plans to reform its "controversial re-education through labor system this year."[32]

See also:

China and involuntary organ harvesting of prisoners

See also: China and involuntary organ harvesting

Several researchers — for example, Canadian human rights lawyer David Matas, former Canadian parliamentarian David Kilgour, and the investigative journalist Ethan Gutmann estimate that tens of thousands of Falun Gong prisoners in communist China have been killed to supply a financially lucrative trade in human organs and cadavers, and that these human rights abuses may be ongoing concern.[33]

China and intellectual property theft

See also: Atheism and stealing

Intellectual property (IP) is knowledge that can be owned. Examples include copyrights, patents, trademarks and trade secrets.

According to the website China Law Blog:

“ The disappearance of Made in China 2025. From 2015 to 2017, the Chinese government touted its Made in China 2025 program as its core policy for development of the Chinese economy. Due to pressure from the U.S., Europe and Japan, public discussion of the program has virtually ceased. Foreign opposition to this program has been based on the following two factors:

...The advances in technical expertise outlined in the program do not rely on Chinese domestic innovation. Rather, the program relies on forced technology transfer and IP theft.[34]

”

The American Enterprise Institute reported in 2018: "In reports from 2013 and 2017 the independent Commission on the Theft of American Intellectual Property concluded that China was the chief culprit in the loss of between $250 and $600 billion annually from IP theft (patents, copyrights, trademarks, and trade secrets)."[35]

Bloomberg News declared concerning China and intellectual property theft: "A 2017 survey by the European Union Chamber of Commerce in China found that 'visible progress' had been made around IP, but 51 percent of firms said enforcement was still inadequate."[36]

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References

  1. ↑ China's dangerous decline, Foreign Affairs magazine, December 22, 2022
  2. ↑ Why China's Navy is a JOKE by Colonel Douglas Macgregor
  3. ↑ Corruption in China, Wikipedia
  4. ↑ Corruption in China, Wikipedia
  5. ↑ China's Communist Party is at a fatal age for one-party regimes. How much longer can it survive?, Australian Broadcasting Corporation, 2020
  6. ↑ [Xi Jinping raises concerns over potential collapse of Chinese Communist Party: Report], Mint News, 2023
  7. ↑ China’s Demographics: It Gets Worse, Forbes magazine, Oct 12, 2022
  8. ↑ Niall Ferguson on the projected drop of China's population in the 21st century
  9. ↑ Invisible China: Hundreds of Millions of Rural Underemployed May Slow China’s Growth., Stanford Center on China's Economy and Institutions
  10. ↑ How Education and Training Affect the Economy
  11. ↑ Book Review: 'Unrivaled' by Michael Beckley, Rand Corporation
  12. ↑ China’s growth is buried under great wall of debt, Reuters, 2023
  13. ↑ this the end of Evergrande? Here’s what may happen next, CNN, 2024
  14. ↑ China is facing the US financial crisis 'on steroids' as the real estate market collapses, famed hedge fund boss says, Yahoo Finance, February 6, 2023
  15. ↑ What’s going on with China’s stock market?, MarketPlace.org
  16. ↑ Who will Dominate the Geopolitical System in this Decade? | Peter Zeihan | IEC 2021
  17. ↑ China’s three-legged race to fend off the 4 Ds of an economic apocalypse, South Morning China Post, January 2024
  18. ↑ [https://uk.finance.yahoo.com/news/why-chinas-economy-big-trouble-114800090.html?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAAENX0VbIjdEzQJIe19QDN4l2U8TUWN3_ksXEPPpOfTtbY5yPNkNiDx12xMv9eFhpiOhyl9JSs54oqyBP2G8KgnmUS9T-XSxmIA4ZezRhp_Z0qhNJNaNh_EC6RcuIpEWXp_JonGK0MMoWMB3iJucROzd6nNY1R2g9-_pNmGKs3EEB Why China's economy is in BIG trouble, Yahoo Finance, April 15, 2024
  19. ↑ [China Slowdown Means It May Never Overtake US Economy, Forecast Shows], Bloomberg News, September 5, 2023
  20. ↑ Why Is Deflation Bad for the Economy?, Investopedia
  21. ↑ What is deflation?, Empower website
  22. ↑ What’s going on with China’s stock market?, MarketPlace.org
  23. ↑ China Beige Book International - About page
  24. ↑ China's tepid economic recovery represents a policy 'narrative shift', says China Beige Book CEO
  25. ↑ China’s leaders speed towards Japanisation, Reuters, October 19, 2023
  26. ↑ Global Index of Religiosity and Atheism (July 27, 2012). PDF file (Worldwide Independent Network/Gallup International), p. 3. Republished at Worldwide Independent Network of Market Research and Opinion Poll website. Archived at Internet Archive website on May 24, 2013.
  27. ↑ Multiple references:
  28. ↑ Senior Chinese Religious Advisor Calls For Promotion Of Atheism In Society, International Business Times
  29. ↑ Labor camps reinforce China's totalitarian rule. Cnn.com (1984-10-09). Retrieved on 2013-03-20.
  30. ↑ "China to reform re-education through labor system", Xinhua, January 8, 2013. 
  31. ↑ Labor camps reinforce China's totalitarian rule. Cnn.com (1984-10-09). Retrieved on 2013-03-20.
  32. ↑ "China to reform re-education through labor system", Xinhua, January 8, 2013. 
  33. ↑ Review of: Ethan Gutmann, “The Slaughter: Mass Killings, Organ Harvesting and China’s Secret Solution to Its Dissident Problem”, (Prometheus Books, 2014).
  34. ↑ The Top Ten Issues for China’s Economy by Steve Dickinson on December 27, 2018, China Law Blog
  35. ↑ Chinese intellectual property theft: Time for show trials (but get our story straight) by Claude Barfield, August 27, 2018, AEIdeas
  36. ↑ [https://www.bloomberg.com/news/articles/2018-12-05/what-s-intellectual-property-and-does-china-steal-it-quicktake What Is Intellectual Property, and Does China Steal It? By Grant Clark, December 4, 2018, Bloomberg News
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