It is hard to tell when a crisis in a dictatorial regime, such as the sudden breakdown of China’s economic model, is not about this or that, but about the regime itself. My own experience in this regard is very discouraging. In 1984, my book Grand Strategy of the Soviet Union contained many pages about nationalities I claimed were heading towards independence — not just the well-known if still very obedient Baltics, Armenians and Georgians, but others occupying vastly larger territories, the then barely known Kazakhs, Uzbeks, Kyrgyz, Tajik and Turkmen (I readily confess that it never occurred to me that Ukrainians might join them).
The response of every established Western Sovietologist was that I had foolishly confused folkloric categories with actual living and breathing nations — they were just “Soviets” who occasionally wore funny hats, and it was pure and utter fantasy that they might ever want to be independent. That was just seven years before the final and official collapse of the Soviet Union.
It is axiomatic that nations endure while regimes must collapse, but none of the easy Soviet analogies works when it comes to China. Yes, Beijing recognises 55 minority populations, but they account for no more than 9% or so of the total, and some of the nationalities really are only folkloric, unlike the Uyghur, Kazakhs and Tibetans whom the Chinese must actively repress.
As to the economy, it only broke the morale of the Soviet Communist Party after two decades of increasingly demoralising stagnation that had become obvious by 1980 even to casual visitors, who noticed a very distinctive no-hope “Soviet” look on most people’s faces. The Chinese Communist Party, by contrast, emerged from a visibly malnourished and downright dirty state — when I lived there in 1976, human waste was carted through its streets — with tentative growth from the early Eighties accelerating from the Nineties, gloriously enriching China until very recently.
Even today’s bad economic news reveals no terminal, necessarily regime-destroying diseases, as was true of the Soviet Union, which had to import wheat every few years even as it built more tractors for its farmers than the US. In China, in fact, the only wealth-destroying disease has been the very thing that every tourist and even some experts have admired immensely: the proliferation of a hugely impressive, mostly well-designed and well-built infrastructure, from high-speed trains that now reach even into Laos while connecting some 550 cities in 33 provinces, to the motorways that link every part of China, some all the way up mountains and into deserts, to the roughly 250 full-service airports (in 1976 only eight had enough runway for our small Trident jet), to the immense ports which imported 95 million metric tons of soya beans alone in 2021, when the Port of London handled 50 million tons of everything.
How do wonderful infrastructures destroy wealth? One example is sufficient. In 2018, on a drive along the North Korea border, I encountered a vast and beautiful white six-lane highway suspension bridge across the Yalu river. It was built to connect the Chinese city of Dandong with North Korea, to service the trade boom Xi expected with the promised opening of the North’s economy. Naturally, it would require a customs house, duly built as a very impressive high-rise, warehouses and more than 10 blocks of commercial offices. Yet when I visited, the bridge ended in a North Korean potato field, traffic was exactly zero, the customs house was empty and so were the office blocks and warehouses, some paid for by private border merchants who were bankrupt when I met them in Dandong (they openly cursed Xi for going along with the US-sponsored Security Council Embargo).
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SubscribeMy sense is Xi’s draconian covid lockdowns broke China. Apart from the economic effects, I think they broke the spirit of the Chinese people. I recall reading an account of an exchange between officials enforcing lockdown and a family. A family member said words to the effect that ok, they’ll go back to their apartment, you win, but ultimately it doesn’t matter because “this is the last of us.” The speaker’s statement was interpreted as meaning their family would have no more children because who’d want to bring kids into modern China.
If Xi is personally to blame for China’s woes, the question is how would he be deposed given his grip on power seems to be so strong? Is there a secret cadre of senior party members willing to arrest him and take power? Would they be more pro-Western? It’s the same problem as wishing Putin gone: would his replacement be better or worse?
as for Putin, the answer is simple: at this point, ANY change would be better. Yes, perhaps in the moment it could be somehow worse (difficult to imagine, though), but it would bring the dynamics and hope to otherwise stalled situation
That’s just so patently untrue it’s difficult to know where to start.
I think it’s worth asking: “better or worse in what way?”.
To an extent, being worse than Putin inside Russia isn’t a problem for anyone else but the Russian people. It’s expansionism that is the problem for the West. I’ll add that Putin would be replaced only if the Ukraine expansion categorically failed. There’s a chance that might bring a new leader determined to “Hit it with a bigger hammer”. But that’s less likely than the alternative.
Why do you think it is “patently untrue”?
Yes, it might be possibly worse.
But, maybe new government would stop Ukrainian war and West would be so grateful that they would force Ukraine to accept loss of Crimea?
Then new Russian government could claim victory and oligarchs could start enjoying their wealth again.
Correct. The new leader might be a Putin clone, but they will at least have the opportunity to distance themselves from the war on the basis that it was “Putin’s Folly”.
Correct. The new leader might be a Putin clone, but they will at least have the opportunity to distance themselves from the war on the basis that it was “Putin’s Folly”.
I think it’s worth asking: “better or worse in what way?”.
To an extent, being worse than Putin inside Russia isn’t a problem for anyone else but the Russian people. It’s expansionism that is the problem for the West. I’ll add that Putin would be replaced only if the Ukraine expansion categorically failed. There’s a chance that might bring a new leader determined to “Hit it with a bigger hammer”. But that’s less likely than the alternative.
Why do you think it is “patently untrue”?
Yes, it might be possibly worse.
But, maybe new government would stop Ukrainian war and West would be so grateful that they would force Ukraine to accept loss of Crimea?
Then new Russian government could claim victory and oligarchs could start enjoying their wealth again.
That’s just so patently untrue it’s difficult to know where to start.
…Civil War, and a period of Warlordism…which is what has followed the collapse of a Chinese Dynasty for millennia…
And the chinese instinct is to always avoid instability and uncertainty.
It seems to be a repeating theme. Empress Dowager Cixi (1800s) was considered a despot but is known for initiating a series of modernisation efforts in China, especially during the later years of her rule. She supported the construction of railways, telegraph lines, modern schools, and military reforms.
These initiatives aimed to strengthen China’s infrastructure, education system, and military capabilities.she supported modernisation efforts, but resisted comprehensive political reforms that could have addressed China’s governance issues and empowered the people.
This lack of reform contributed to social unrest and political instability.
That’s a terrifying prospect, given the number of seriously unpleasant weapons those warlords might have access to.
Bosnia, with nukes. Help!
And the chinese instinct is to always avoid instability and uncertainty.
It seems to be a repeating theme. Empress Dowager Cixi (1800s) was considered a despot but is known for initiating a series of modernisation efforts in China, especially during the later years of her rule. She supported the construction of railways, telegraph lines, modern schools, and military reforms.
These initiatives aimed to strengthen China’s infrastructure, education system, and military capabilities.she supported modernisation efforts, but resisted comprehensive political reforms that could have addressed China’s governance issues and empowered the people.
This lack of reform contributed to social unrest and political instability.
That’s a terrifying prospect, given the number of seriously unpleasant weapons those warlords might have access to.
Bosnia, with nukes. Help!
Havent resubscribed and so seem to be missing some edit functions. Sorry for the double post.
I had a 3-hour conversation with a chinese friend living in the west last night. She is very pessimistic about what is going on in China. The young in particular are broken and have taken the 4 vows : No courtship, no marriage, no children, no buying of a home. The perils of home ownership are now well understood!
They have embraced the “lying flat” and “letting it rot” postures of extreme passivity in the face of massive youth unemployment and oversupply from the tertiary institutions. Many are resigned to staying at home forever.There is even the phenomenon of paid children : parents paying their children a salary to be full-time children looking after their parents, ie cooking, cleaning, coddling the parents.
Is there such a clear realisation that Xi is the architect of their troubles as the author asserts?Not according to my friend. She says many are brainwashed. Some are so crazy that they are attacking restaurants selling roast goose as the word goose sounds similar to Russian and such restaurants are supposedly disrespecting Russian-China ties. Newly expanded anti-spying laws are creating a climate of fear, paranoia and suspicion she thinks reminiscent of the cultural revolution. Many of the young are true believers of communism and statesman Xi. There was an incident recently in London where Chinese art students (Royal college of Arts) painted communist propaganda slogans on a Brick Lane wall.
What does one do with anger in China? Take to the streets to be disappeared or gunned down?
The upside is that fewer people is good for the planet
Dead wrong in fact. Dysfunctional demographics is at the heart of the problem in the West and is the whole problem in China.
If you care to look at what is currently happening in robotics and artificial intelligence then you will see that we are not far off the time when robots will replace human labour. Most experts believe that artificial general intelligence will arrive within 5 years and humans being born now will be an unemployable burden.
pfui
If robotics and AI create wealth (there would be no investment if these were unlikely to) then that wealth allows new entrepreneurial initiatives, creating jobs that never previously existed – the vast majority of jobs that exist now never even existed 50 years ago.
This process is inexorable if wealth via technology continues to be created. The wealth is distributed generally across the economy, given a few basics of freedom to trade and the protection of the transactions of that trade by the rule of law
I’m afraid you are mistaken. The wealth generated by replacing humans with machines is not “distributed generally across the economy”. It is sucked up and hoarded. This inexorable march of progress will not be over until every last possible job has been destroyed. In the meantime, carry on pumping your own petrol; checking out your own groceries and if you have any complaints about it, talk to the customer services bot.
Not true. If the wealth is hoarded then the elite suffer. That is why they are proposing a universal basic income so people continue to buy goods and are free of the drudgery of labour. I always choose the automated options to defeat ignorant Luddites
Not true. If the wealth is hoarded then the elite suffer. That is why they are proposing a universal basic income so people continue to buy goods and are free of the drudgery of labour. I always choose the automated options to defeat ignorant Luddites
I’m afraid you are mistaken. The wealth generated by replacing humans with machines is not “distributed generally across the economy”. It is sucked up and hoarded. This inexorable march of progress will not be over until every last possible job has been destroyed. In the meantime, carry on pumping your own petrol; checking out your own groceries and if you have any complaints about it, talk to the customer services bot.
Most serious experts wonder if we’ll actually ever achieve true AGI.
False. Most serious experts expect it within 15 years
False. Most serious experts expect it within 15 years
pfui
If robotics and AI create wealth (there would be no investment if these were unlikely to) then that wealth allows new entrepreneurial initiatives, creating jobs that never previously existed – the vast majority of jobs that exist now never even existed 50 years ago.
This process is inexorable if wealth via technology continues to be created. The wealth is distributed generally across the economy, given a few basics of freedom to trade and the protection of the transactions of that trade by the rule of law
Most serious experts wonder if we’ll actually ever achieve true AGI.
If you care to look at what is currently happening in robotics and artificial intelligence then you will see that we are not far off the time when robots will replace human labour. Most experts believe that artificial general intelligence will arrive within 5 years and humans being born now will be an unemployable burden.
If your really believe that, then do us all a favour Dug
No need to be unpleasant: it suggests you are not confident that you are right and indeed, you would have good reason to be.
No need to be unpleasant: it suggests you are not confident that you are right and indeed, you would have good reason to be.
Definitely! If those fewer people are good to the planet
AI will have to ensure that they are
AI will have to ensure that they are
Dead wrong in fact. Dysfunctional demographics is at the heart of the problem in the West and is the whole problem in China.
If your really believe that, then do us all a favour Dug
Definitely! If those fewer people are good to the planet
Lying flat is a response to hopelessness that perhaps is worsened by China’s social credit system that makes it harder for people to get ahead.
Interesting post, thanks. I’m surprised that Xi isn’t given more blame, but brainwashing through state media is powerful as we all learned during the covid era.
We know that many people in Russia had doubts about Stalin policies but were careful to not express their views even to family members.
Xi is not Stalin, but Chinese are not stupid.
You either try to do your best under current leadership or become non person.
Most Germans didn’t blame Hitler in 1938. Everybody blames him now.
Yes, everybody does, but that is highly problematic, because it also stops almost everybody from understanding that the people are as much to blame for what had happened as Hitler is to blame. And that’s an open invitation for it to happen all over again. And not only in Germany.
I acknowledge that it is difficult to balance reconciliation and doing proper lessons learned after catastrophic episodes such as national socialism or covid. And the worst is yet to come with the climate hysteria.
Yes, everybody does, but that is highly problematic, because it also stops almost everybody from understanding that the people are as much to blame for what had happened as Hitler is to blame. And that’s an open invitation for it to happen all over again. And not only in Germany.
I acknowledge that it is difficult to balance reconciliation and doing proper lessons learned after catastrophic episodes such as national socialism or covid. And the worst is yet to come with the climate hysteria.
We know that many people in Russia had doubts about Stalin policies but were careful to not express their views even to family members.
Xi is not Stalin, but Chinese are not stupid.
You either try to do your best under current leadership or become non person.
Most Germans didn’t blame Hitler in 1938. Everybody blames him now.
But the older, more intelligent people do know what is happening. They remember what happened with Mao and realize that Xi is copying Mao.
And what will they do with this realisation? Who stopped Mao then?
Yes.
You seem to understand workings of dictatorships.
Unlike many in the West and on forums like this who have no clue.
Yes.
You seem to understand workings of dictatorships.
Unlike many in the West and on forums like this who have no clue.
And what will they do with this realisation? Who stopped Mao then?
Sounds like an opportunity for a new hardcore music scene, sino-punk, perhaps.
Let’s hope it is as common as Chinese friend of you claims.
Failing China is in the West interest.
West did great without China till late 90s.
All this talk about China being relevant is due to idiotic globalisation policies of the West.
Xi’s China looks increasingly like Hitler’s Germany in the 1930’s. Extreme nationalism is encouraged and rewarded while sensible people can do nothing but keep their heads down. The dictator provokes foreign action then uses that action as an excuse for further nationalism and militarism. The US’s anti-China turn was both predictable and expected. It’s one thing for a third world nation far behind the world in terms of technology and military might to manipulate their currency, steal technology, and otherwise tilt the economic board in their favor, but it’s quite another for the world’s second largest economy and military to continue doing it and expecting established powers to just keep looking the other way. The US and others are simply acting in their national interest, but, unfortunately, this plays neatly into Xi’s narrative of an ‘arrogant west’ trying to ‘keep China down’. Get ready to see all those civilian factories that were built by shortsighted western investors who don’t see anything but profit and loss turned into factories for Chinese arms and armaments as China follows Hitler’s example of using military service and arms manufacture to keep everybody employed and sufficiently under the state’s supervision. I fully expect they’ll soon be putting out propaganda aimed at getting women to have more children that could have been lifted nearly word for word from Berlin 1936, replacing white Aryans with Han Chinese.
The upside is that fewer people is good for the planet
Lying flat is a response to hopelessness that perhaps is worsened by China’s social credit system that makes it harder for people to get ahead.
Interesting post, thanks. I’m surprised that Xi isn’t given more blame, but brainwashing through state media is powerful as we all learned during the covid era.
But the older, more intelligent people do know what is happening. They remember what happened with Mao and realize that Xi is copying Mao.
Sounds like an opportunity for a new hardcore music scene, sino-punk, perhaps.
Let’s hope it is as common as Chinese friend of you claims.
Failing China is in the West interest.
West did great without China till late 90s.
All this talk about China being relevant is due to idiotic globalisation policies of the West.
Xi’s China looks increasingly like Hitler’s Germany in the 1930’s. Extreme nationalism is encouraged and rewarded while sensible people can do nothing but keep their heads down. The dictator provokes foreign action then uses that action as an excuse for further nationalism and militarism. The US’s anti-China turn was both predictable and expected. It’s one thing for a third world nation far behind the world in terms of technology and military might to manipulate their currency, steal technology, and otherwise tilt the economic board in their favor, but it’s quite another for the world’s second largest economy and military to continue doing it and expecting established powers to just keep looking the other way. The US and others are simply acting in their national interest, but, unfortunately, this plays neatly into Xi’s narrative of an ‘arrogant west’ trying to ‘keep China down’. Get ready to see all those civilian factories that were built by shortsighted western investors who don’t see anything but profit and loss turned into factories for Chinese arms and armaments as China follows Hitler’s example of using military service and arms manufacture to keep everybody employed and sufficiently under the state’s supervision. I fully expect they’ll soon be putting out propaganda aimed at getting women to have more children that could have been lifted nearly word for word from Berlin 1936, replacing white Aryans with Han Chinese.
I recall a similar story of a young Chinese man had been apprehended for some crime (I think of a political nature), who was to told that his punishment would extend for three generations. He reacted by laughing and telling his captors, “No, this is the last generation.”
Great post.
I have no idea why some people believe that non Communist China would be less hostile, in reality, than current rulling class?
WW1 started between powers which were not ideologically opposed to each other.
But still their national interest collided.
For starters West needs to stop training Chinese students.
China is an enemy.
I know it will not happen.
But would Britain train German pilots or naval crews in let say 1938?
Since my first visit to China in 2002 I’ve spent over nine years living here, mainly in what’s called a second tier city of between 4 and 6 million people
I spent the entire three years of the Covid pandemic in the country, in a city where there was a ‘lockdown’ from the 1st February 2020 until the 26 February 2020, 800 miles from Wuhan. This was a city of 4 million+ people.
Education and almost all work places were shut, along with restaurants, shops, places of entertainment, gyms and even parks. Buses and trains were not running, motorway exits were closed, internal and international flights were cancelled. A few essential workplaces such as hospitals were allowed to continue working.
But there were no restrictions on leaving home for exercise, (masks were compulsory), and open air markets ensured people could buy food. Because of fear about what was happening in Wuhan, and there being nowhere to go, this hard lockdown lasted just three weeks.
Your ‘sense of Xi’s draconian covid lockdowns’, is a figment of your imagination and for almost all of China, other than small parts of Shanghai, Beijing and a few other places, there was nothing remotely approaching Boris Johnson’s dithering and ignorance, that resulted in three lockdowns lasting almost 16 months and 232,112 deaths.
as for Putin, the answer is simple: at this point, ANY change would be better. Yes, perhaps in the moment it could be somehow worse (difficult to imagine, though), but it would bring the dynamics and hope to otherwise stalled situation
…Civil War, and a period of Warlordism…which is what has followed the collapse of a Chinese Dynasty for millennia…
Havent resubscribed and so seem to be missing some edit functions. Sorry for the double post.
I had a 3-hour conversation with a chinese friend living in the west last night. She is very pessimistic about what is going on in China. The young in particular are broken and have taken the 4 vows : No courtship, no marriage, no children, no buying of a home. The perils of home ownership are now well understood!
They have embraced the “lying flat” and “letting it rot” postures of extreme passivity in the face of massive youth unemployment and oversupply from the tertiary institutions. Many are resigned to staying at home forever.There is even the phenomenon of paid children : parents paying their children a salary to be full-time children looking after their parents, ie cooking, cleaning, coddling the parents.
Is there such a clear realisation that Xi is the architect of their troubles as the author asserts?Not according to my friend. She says many are brainwashed. Some are so crazy that they are attacking restaurants selling roast goose as the word goose sounds similar to Russian and such restaurants are supposedly disrespecting Russian-China ties. Newly expanded anti-spying laws are creating a climate of fear, paranoia and suspicion she thinks reminiscent of the cultural revolution. Many of the young are true believers of communism and statesman Xi. There was an incident recently in London where Chinese art students (Royal college of Arts) painted communist propaganda slogans on a Brick Lane wall.
What does one do with anger in China? Take to the streets to be disappeared or gunned down?
I recall a similar story of a young Chinese man had been apprehended for some crime (I think of a political nature), who was to told that his punishment would extend for three generations. He reacted by laughing and telling his captors, “No, this is the last generation.”
Great post.
I have no idea why some people believe that non Communist China would be less hostile, in reality, than current rulling class?
WW1 started between powers which were not ideologically opposed to each other.
But still their national interest collided.
For starters West needs to stop training Chinese students.
China is an enemy.
I know it will not happen.
But would Britain train German pilots or naval crews in let say 1938?
Since my first visit to China in 2002 I’ve spent over nine years living here, mainly in what’s called a second tier city of between 4 and 6 million people
I spent the entire three years of the Covid pandemic in the country, in a city where there was a ‘lockdown’ from the 1st February 2020 until the 26 February 2020, 800 miles from Wuhan. This was a city of 4 million+ people.
Education and almost all work places were shut, along with restaurants, shops, places of entertainment, gyms and even parks. Buses and trains were not running, motorway exits were closed, internal and international flights were cancelled. A few essential workplaces such as hospitals were allowed to continue working.
But there were no restrictions on leaving home for exercise, (masks were compulsory), and open air markets ensured people could buy food. Because of fear about what was happening in Wuhan, and there being nowhere to go, this hard lockdown lasted just three weeks.
Your ‘sense of Xi’s draconian covid lockdowns’, is a figment of your imagination and for almost all of China, other than small parts of Shanghai, Beijing and a few other places, there was nothing remotely approaching Boris Johnson’s dithering and ignorance, that resulted in three lockdowns lasting almost 16 months and 232,112 deaths.
My sense is Xi’s draconian covid lockdowns broke China. Apart from the economic effects, I think they broke the spirit of the Chinese people. I recall reading an account of an exchange between officials enforcing lockdown and a family. A family member said words to the effect that ok, they’ll go back to their apartment, you win, but ultimately it doesn’t matter because “this is the last of us.” The speaker’s statement was interpreted as meaning their family would have no more children because who’d want to bring kids into modern China.
If Xi is personally to blame for China’s woes, the question is how would he be deposed given his grip on power seems to be so strong? Is there a secret cadre of senior party members willing to arrest him and take power? Would they be more pro-Western? It’s the same problem as wishing Putin gone: would his replacement be better or worse?
“No matter how many men you kill, you can’t kill your successor”.*
(Seneca’s warning to Nero, 1st century.)
Putin may have done that several times already – but of course one time he won’t.
Well his successor will have to be elected. I suppose. Though the west would prefer a coup.
Seriously?
It was almost better in the old Soviet days, when Party officials would quietly sideline one leader, and install another.
Seriously?
It was almost better in the old Soviet days, when Party officials would quietly sideline one leader, and install another.
Well his successor will have to be elected. I suppose. Though the west would prefer a coup.
And you can’t punish children who will never be born.
Then like Stalin said: “no man no problem”
Most dictatorships fail when they become too soft.
That is why North Korean and Iran leaders are correct in their policies in terms of self preservation.
Putin may have done that several times already – but of course one time he won’t.
And you can’t punish children who will never be born.
Then like Stalin said: “no man no problem”
Most dictatorships fail when they become too soft.
That is why North Korean and Iran leaders are correct in their policies in terms of self preservation.
“No matter how many men you kill, you can’t kill your successor”.*
(Seneca’s warning to Nero, 1st century.)
So much of this is bananas. The idea that the US was able to shake off the financial crisis because homeowners were able to walk away from loans and thus write down debt compared to the benighted Japanese, who held their debts and suffered a lost decade following the bursting of the bubble.
The US position is sort of true (although many, many more lost their homes to foreclosure than “walking away”). And although the financial institutions were able to write down their debts, what did they do with their lightened balance sheets (and massive federal support)? They bought up the homes that households had been foreclosed out of at bargain basement values. And then rented them back to the same rubes at rising rents, because the foreclosed couldn’t get another mortgage.
What took place in Japan wasn’t all that pretty, but it didn’t involve a massive upward transfer of wealth and a bailout of the rich by the working poor. And the legacy of that is far from over.
So much of this is bananas. The idea that the US was able to shake off the financial crisis because homeowners were able to walk away from loans and thus write down debt compared to the benighted Japanese, who held their debts and suffered a lost decade following the bursting of the bubble.
The US position is sort of true (although many, many more lost their homes to foreclosure than “walking away”). And although the financial institutions were able to write down their debts, what did they do with their lightened balance sheets (and massive federal support)? They bought up the homes that households had been foreclosed out of at bargain basement values. And then rented them back to the same rubes at rising rents, because the foreclosed couldn’t get another mortgage.
What took place in Japan wasn’t all that pretty, but it didn’t involve a massive upward transfer of wealth and a bailout of the rich by the working poor. And the legacy of that is far from over.
Fascinating as usual. Although I’m not sure a post-communist China would be any kind of consolation prize, given the way post-communist Russia panned out.
Well, post Communist Russia is much less dangerous than Soviet Union and hundred of millions of peoples of former Soviet colonies regained their freedom.
You and other 51 people who upvoted you somehow see it as failure?
Well, post Communist Russia is much less dangerous than Soviet Union and hundred of millions of peoples of former Soviet colonies regained their freedom.
You and other 51 people who upvoted you somehow see it as failure?
Fascinating as usual. Although I’m not sure a post-communist China would be any kind of consolation prize, given the way post-communist Russia panned out.
We are at a system change point in history with convergence of multiple financial, social, and technological factors. Whether its China, the US, or Europe a vacuum will need to be filled and the world is short of ideas. In this household we have spent time learning core skills, diversifying risk, and preparing for a very uncertain decade. I hope our efforts will all prove to be the product of an over-active imagination, but irrespective of China’s woes they are far from alone in facing a wall of worry and “situation normal” does not lopk like the global default.
I would love to hear details on your preparations if you have the time. I am anxious about the future but unsure what to do.
You are wise to prepare. If China, the U.S. and most of Western Europe is wallowing in debt, as we usher in a net zero economy, it’s difficult to imagine a positive outcome. Or, we just devalue the currency by 75% and everyone takes a proportional haircut.
https://www.statista.com/statistics/274179/national-debt-in-eu-countries/
It is mathematically impossible for all currencies to simultaneously devalue and the dollar hegemonic based upon US debt means that debt has ultimately become irrelevant to a currency’s value
It is mathematically impossible for all currencies to simultaneously devalue and the dollar hegemonic based upon US debt means that debt has ultimately become irrelevant to a currency’s value
I would love to hear details on your preparations if you have the time. I am anxious about the future but unsure what to do.
You are wise to prepare. If China, the U.S. and most of Western Europe is wallowing in debt, as we usher in a net zero economy, it’s difficult to imagine a positive outcome. Or, we just devalue the currency by 75% and everyone takes a proportional haircut.
https://www.statista.com/statistics/274179/national-debt-in-eu-countries/
We are at a system change point in history with convergence of multiple financial, social, and technological factors. Whether its China, the US, or Europe a vacuum will need to be filled and the world is short of ideas. In this household we have spent time learning core skills, diversifying risk, and preparing for a very uncertain decade. I hope our efforts will all prove to be the product of an over-active imagination, but irrespective of China’s woes they are far from alone in facing a wall of worry and “situation normal” does not lopk like the global default.
Central planning always fails. China’s economic miracle happened because the country allowed for enterprise to flourish. Xi has sought to turn his country into the preeminent world power but in the process has reversed the economic reforms that allowed economic growth. Now, like all planned economies, China faces its reckoning.
Agree. This is the executive summary
Agree. This is the executive summary
Central planning always fails. China’s economic miracle happened because the country allowed for enterprise to flourish. Xi has sought to turn his country into the preeminent world power but in the process has reversed the economic reforms that allowed economic growth. Now, like all planned economies, China faces its reckoning.
The difference between the US and China in dealing with a debt crisis is this: The US dollar as the world reserve currency gives the US the ability to print money. For 30 years we have been sending those printed dollars to China through our trade imbalance that has funded their growth. The Covid epidemic and the gradual Western decoupling with China is cutting off that funding. Xi’s conceit that he is responsible for China’s success rather than the foolishness of the Western international corporations (Davos crowd) may be his undoing.
The difference between the US and China in dealing with a debt crisis is this: The US dollar as the world reserve currency gives the US the ability to print money. For 30 years we have been sending those printed dollars to China through our trade imbalance that has funded their growth. The Covid epidemic and the gradual Western decoupling with China is cutting off that funding. Xi’s conceit that he is responsible for China’s success rather than the foolishness of the Western international corporations (Davos crowd) may be his undoing.
Great article.
“we sit around writing comments, longer than the article itself, with long rambling paragraphs full of philosophical statements and words of deep wisdom, editing repeatedly and multiple spell check, only to be shunted at the end with 5 likes, or often, horror of horrors, with the dreaded red mark of shame….
And this …this…gets 24 likes?”
– What pretty much all the Unherd subscriber base is thinking right now.
Only the posers
But it is a great article!
You are confusing popularity with substance. It’s a common misapprehension today.
Well, upvoting is quicker than posting something similar.
Only the posers
But it is a great article!
You are confusing popularity with substance. It’s a common misapprehension today.
Well, upvoting is quicker than posting something similar.
“we sit around writing comments, longer than the article itself, with long rambling paragraphs full of philosophical statements and words of deep wisdom, editing repeatedly and multiple spell check, only to be shunted at the end with 5 likes, or often, horror of horrors, with the dreaded red mark of shame….
And this …this…gets 24 likes?”
– What pretty much all the Unherd subscriber base is thinking right now.
Great article.
So COVID may kill Communist China!
It almost makes one believe in Divine Retribution.
So COVID may kill Communist China!
It almost makes one believe in Divine Retribution.
‘Many in China also know that Xi is personally responsible for the spread of anti-Chinese attitudes around the world, which, in turn, has greatly reduced investment, affected employment, and made Chinese tourists and students feel unwelcome in many countries’
Chinese students and tourists are more likely to be unwelcome because they have unattractive habits such as literally pushing people out of the way, going back to buffets and shoving food into plastic bags, in public loos not ‘pulling the plug’ and even leaving the loo door wide open while in there.
Aha! “the world’s oldest civilisation” at its very best.Thank you.
Charles, I bet you thank god you’re an Englishman every night.
I most certainly do!
Me too!
Good man!
Good man!
Me too!
Perhaps you even “consider you have won life’s lottery”.
Actuality despite all its woes and crumbling culture, we are still very lucky to live in this grubby, bustling, mostly good-natured country.
I most certainly do!
Perhaps you even “consider you have won life’s lottery”.
Actuality despite all its woes and crumbling culture, we are still very lucky to live in this grubby, bustling, mostly good-natured country.
Charles, I bet you thank god you’re an Englishman every night.
Can confirm…..just returned from a trip to French Polynesia and the locals intensely dislike the Chinese. Many first hand stories were told by locals and they’re very glad that the Chinese tourist presence has almost completely dried up even though their economy is largely driven by visitor’s money.
Indeed. One only needs to experience their most uncivilized behaviour on a NYC subway. Especially on the N train.
Please tell us more.
Chinese I met in London were polite and well behaved.
Please tell us more.
Chinese I met in London were polite and well behaved.
It’s the same in much of Africa, where imported Chinese workers and engineers haven’t endeared themselves to the locals.
Indeed. One only needs to experience their most uncivilized behaviour on a NYC subway. Especially on the N train.
It’s the same in much of Africa, where imported Chinese workers and engineers haven’t endeared themselves to the locals.
I am not a great fan of China.
However, ones I came across were polite.
Unlike most Germans and French.
No idea about buffets and toilets.
Aha! “the world’s oldest civilisation” at its very best.Thank you.
Can confirm…..just returned from a trip to French Polynesia and the locals intensely dislike the Chinese. Many first hand stories were told by locals and they’re very glad that the Chinese tourist presence has almost completely dried up even though their economy is largely driven by visitor’s money.
I am not a great fan of China.
However, ones I came across were polite.
Unlike most Germans and French.
No idea about buffets and toilets.
‘Many in China also know that Xi is personally responsible for the spread of anti-Chinese attitudes around the world, which, in turn, has greatly reduced investment, affected employment, and made Chinese tourists and students feel unwelcome in many countries’
Chinese students and tourists are more likely to be unwelcome because they have unattractive habits such as literally pushing people out of the way, going back to buffets and shoving food into plastic bags, in public loos not ‘pulling the plug’ and even leaving the loo door wide open while in there.
There seem to be 2 narratives about China, the country is finished because there are not enough new workers for the economy to grow. The same people also want me to believe that the Chinese economy is doomed because of high unemployment
Both things are possible.
Low birth rate kills you long term.
High unemployment creates problems for current leadership.
Both things are possible.
Low birth rate kills you long term.
High unemployment creates problems for current leadership.
There seem to be 2 narratives about China, the country is finished because there are not enough new workers for the economy to grow. The same people also want me to believe that the Chinese economy is doomed because of high unemployment
In any case, Xi’s talk of war — which is all about the “rejuvenation” of Chinese manhood
Viagra’s cheaper.
Putin and Xi shall be known hereafter as the Viagra Twins
I reckon Putin didn’t need the blue pill last night.
Not the one from The Matrix, I’m guessing?
Not a blue pill but he certainly gave Prigozhin a surface to air suppository
Not the one from The Matrix, I’m guessing?
Not a blue pill but he certainly gave Prigozhin a surface to air suppository
I reckon Putin didn’t need the blue pill last night.
Putin and Xi shall be known hereafter as the Viagra Twins
In any case, Xi’s talk of war — which is all about the “rejuvenation” of Chinese manhood
Viagra’s cheaper.
Illuminating collation of some of the challenges facing Xi but the final paragraph suggests Luttwak is as unsure as the rest of us as to how this will play out. The original justification for “containing” the USSR in the late 1940s was that, sooner or later, the Russian regime would mellow and become less aggressive (which it did albeit four decades later). Maybe all we can sensibly do today is apply the same policy to China and wait patiently. As Luttwak says we can now imagine a post Xi or even a post communist China but even he seems reluctant to forecast confidently its imminent arrival. Whether we need to wait four months or four decades is anyone’s guess.
Illuminating collation of some of the challenges facing Xi but the final paragraph suggests Luttwak is as unsure as the rest of us as to how this will play out. The original justification for “containing” the USSR in the late 1940s was that, sooner or later, the Russian regime would mellow and become less aggressive (which it did albeit four decades later). Maybe all we can sensibly do today is apply the same policy to China and wait patiently. As Luttwak says we can now imagine a post Xi or even a post communist China but even he seems reluctant to forecast confidently its imminent arrival. Whether we need to wait four months or four decades is anyone’s guess.
At long-content commentators’ suggestion that people go onto to YouTube and view some walking tours of Chinese cities. No audio, nothing, just walking tours. I found that somewhat helpful to understand China a bit better, and I recommend people try it themselves.
Top tip. See also the Joe and Nic’s Road Trip channel on YouTube for fascinating, unvarnished drive-throughs of US towns.
Top tip. See also the Joe and Nic’s Road Trip channel on YouTube for fascinating, unvarnished drive-throughs of US towns.
At long-content commentators’ suggestion that people go onto to YouTube and view some walking tours of Chinese cities. No audio, nothing, just walking tours. I found that somewhat helpful to understand China a bit better, and I recommend people try it themselves.
Let’s hope the Author’s contention struggling dictators don’t seek to distract with armed conflict as much as we might think proves prescient.
He doesn’t mention the Taiwan elections next year with pro-independence candidate/parties looking likely to win. Can Xi absorb that too without lashing out? At which point a chain reaction may occur outside his control but many others too. 2024 going to be a quite a geo-political year.
Let’s hope the Author’s contention struggling dictators don’t seek to distract with armed conflict as much as we might think proves prescient.
He doesn’t mention the Taiwan elections next year with pro-independence candidate/parties looking likely to win. Can Xi absorb that too without lashing out? At which point a chain reaction may occur outside his control but many others too. 2024 going to be a quite a geo-political year.
Maybe a Mafia state (or number of regional states) is the most likely outcome to the fall of a Communism, Russia being an obvious example. The most delusional and dangerous assumption is that ‘anything would be better’ than the current regime, leader, etc. One thing for sure is that they won’t adopt western style democracy – there is no mechanism or cultural basis for doing so. The world will just became more dangerous.
It would be better for the West.
Maybe I am too cynical and heartless, but I don’t much care about about Chinese and Asians and Africans.
Do you really think they care about us?
It would be better for the West.
Maybe I am too cynical and heartless, but I don’t much care about about Chinese and Asians and Africans.
Do you really think they care about us?
Maybe a Mafia state (or number of regional states) is the most likely outcome to the fall of a Communism, Russia being an obvious example. The most delusional and dangerous assumption is that ‘anything would be better’ than the current regime, leader, etc. One thing for sure is that they won’t adopt western style democracy – there is no mechanism or cultural basis for doing so. The world will just became more dangerous.
I agree with most of the authors points.
That said, I think the greatest problem China faces is demographics.
You can not have a nation of 4-2-1 children, expect those children to care for their parents AND conclude they have the resources to have their own families.
Never mind that the ratio of men to women is way out of whack because parents who could only have one child chose to have sons and abort daughters.
You cannot expect people to tap into savings and stimulate the economy when those savings are trapped in illiquid assets like apartments, particularly when those assets are depreciating in value.
No, unless something dramatic happens, China is on a decades long path to irrelevancy.
It is both tragic and unnecessary.
The only outstanding questions now are..
Will the regime do something radical and dramatic such as sacrificing the old and compelling young people to marry and have babies. Seems crazy to us but the the forced abortions that occured under the 1 child policy also seem nuts to us. Maybe they decide to default on all that debt or a very large portion of it. Maybe that happens in a planned way or not.Will they go quietly or with a big bang?
China will continue to grow. The whole collapsing narrative is overblown as is the demographics. You would swear that no western country had demographic challenges, many are worse and have been below replacement for decades.
Who will be the first to open a “take away “ on the Moon?
China or India?
I prefer Indian food to Chinese.
But neither would survive.
They would attack each other shops..
I prefer Indian food to Chinese.
But neither would survive.
They would attack each other shops..
Define “grow”.
And, grow how? Debt fueled investment?
Are they somehow gonna actually get domestic consumption on track with astronomical youth unemployment, with a graying population, with young people who have to take care of their parents and grandparents, with a population that has its wealth tied up in property that is depreciating?
Really, where is this miracle growth gonna come from exactly?
And yes, the west has its own demographic issues, but at least we are closer to replacement than China and we have more immigration.
You think mass importation of low IQ savages from sh*t countries is a solution to West problems?
Turning West into Muslim or African helhole is not solving anything.
You think mass importation of low IQ savages from sh*t countries is a solution to West problems?
Turning West into Muslim or African helhole is not solving anything.
Wrong. The demographics in China are far worse than most Western countries (and the USA will continue to grow). And China’s not going to have immigration to fall back on a) because its population is so large that you’d needs 10s of millions to move the needle and b) no one’s queueing up to move there anyway.
China’s demographic risk is not only the population age imbalance and trend lines but the risk of civil unrest/ war between the wealthy coastal regions and an impoverished (relatively) interior.
This is the historical demarcation of past civil wars and is Xi’s greatest fear. It lies behind all his retro-grade re-centralization of power and is why the senior party hacks allowed this to happen – they too fear the same nightmare
The continuation of a united China is possible but historically unusual. Ancient deep-seated cultural and dynastic memes, unexpunged by brutal Maoist purges and not yet nullified by Deng’s offer of prosperity for all, may yet express themselves in very untidy ways
Western nation’s populations are still growing despite the birth rate being below replacement level due to immigration. With wages less than 1/4 of most western nations, youth unemployment of 20% and an authoritarian government, not many immigrants are choosing to go to China to offset the lack of babies
Please Billy.
Mass immigration of low IQ savages into Europe is not long term solution to West problems, regardless of China problems.
Please Billy.
Mass immigration of low IQ savages into Europe is not long term solution to West problems, regardless of China problems.
Who will be the first to open a “take away “ on the Moon?
China or India?
Define “grow”.
And, grow how? Debt fueled investment?
Are they somehow gonna actually get domestic consumption on track with astronomical youth unemployment, with a graying population, with young people who have to take care of their parents and grandparents, with a population that has its wealth tied up in property that is depreciating?
Really, where is this miracle growth gonna come from exactly?
And yes, the west has its own demographic issues, but at least we are closer to replacement than China and we have more immigration.
Wrong. The demographics in China are far worse than most Western countries (and the USA will continue to grow). And China’s not going to have immigration to fall back on a) because its population is so large that you’d needs 10s of millions to move the needle and b) no one’s queueing up to move there anyway.
China’s demographic risk is not only the population age imbalance and trend lines but the risk of civil unrest/ war between the wealthy coastal regions and an impoverished (relatively) interior.
This is the historical demarcation of past civil wars and is Xi’s greatest fear. It lies behind all his retro-grade re-centralization of power and is why the senior party hacks allowed this to happen – they too fear the same nightmare
The continuation of a united China is possible but historically unusual. Ancient deep-seated cultural and dynastic memes, unexpunged by brutal Maoist purges and not yet nullified by Deng’s offer of prosperity for all, may yet express themselves in very untidy ways
Western nation’s populations are still growing despite the birth rate being below replacement level due to immigration. With wages less than 1/4 of most western nations, youth unemployment of 20% and an authoritarian government, not many immigrants are choosing to go to China to offset the lack of babies
China will continue to grow. The whole collapsing narrative is overblown as is the demographics. You would swear that no western country had demographic challenges, many are worse and have been below replacement for decades.
I agree with most of the authors points.
That said, I think the greatest problem China faces is demographics.
You can not have a nation of 4-2-1 children, expect those children to care for their parents AND conclude they have the resources to have their own families.
Never mind that the ratio of men to women is way out of whack because parents who could only have one child chose to have sons and abort daughters.
You cannot expect people to tap into savings and stimulate the economy when those savings are trapped in illiquid assets like apartments, particularly when those assets are depreciating in value.
No, unless something dramatic happens, China is on a decades long path to irrelevancy.
It is both tragic and unnecessary.
The only outstanding questions now are..
Will the regime do something radical and dramatic such as sacrificing the old and compelling young people to marry and have babies. Seems crazy to us but the the forced abortions that occured under the 1 child policy also seem nuts to us. Maybe they decide to default on all that debt or a very large portion of it. Maybe that happens in a planned way or not.Will they go quietly or with a big bang?
I see, in other news, that China has grown by 6.3% yoy to this last quarter.
It’s hard to believe anything anymore. A quick search online showed that the bridge described in the article is only 4 lanes and has finally opened to N. Korea.
No doubt. In China GDP is an input. It is set by the CCP and local governments then borrow as needed to fund infrastructure projects – and as GDP is a measure of economic activity this works. Of course there is the debt …. but Luttwak talked about that.
If Britain borrowed £100 billion and spent the whole lot on motorways to nowhere it would also see a large increase in GDP, however it would be stuck with a massive debt and lots of roads that didn’t improve the nation’s productivity. Simply looking at GDP is overly simplistic
You mean like HS2?
Yes.
This is uk Chinese type idiocy.
Yes.
This is uk Chinese type idiocy.
You mean like HS2?
It’s hard to believe anything anymore. A quick search online showed that the bridge described in the article is only 4 lanes and has finally opened to N. Korea.
No doubt. In China GDP is an input. It is set by the CCP and local governments then borrow as needed to fund infrastructure projects – and as GDP is a measure of economic activity this works. Of course there is the debt …. but Luttwak talked about that.
If Britain borrowed £100 billion and spent the whole lot on motorways to nowhere it would also see a large increase in GDP, however it would be stuck with a massive debt and lots of roads that didn’t improve the nation’s productivity. Simply looking at GDP is overly simplistic
I see, in other news, that China has grown by 6.3% yoy to this last quarter.
Massive Soviet wheat purchases kept the fabled Rock Island Line alive until 1980.
Massive Soviet wheat purchases kept the fabled Rock Island Line alive until 1980.
Suggest Xi migrates to Taiwan, then generously offers to become the leader of a unified Nationalist China in a DPP / Kuomintang coalition.
We need a laughing emoji option.
We need a laughing emoji option.
Suggest Xi migrates to Taiwan, then generously offers to become the leader of a unified Nationalist China in a DPP / Kuomintang coalition.
‘as was true of the Soviet Union, which had to import wheat every few years even as it built more tractors for its farmers than the US.’
Why was this? Because of incompetent farming practices or poor soil for wheat growing?
Incompetent farming practices. There was no real incentive to increase yields , just meet your target.
In other words we kept the putrid USSR alive because we/NATO needed a credible enemy.
In the end off course the USSR proved to be too stupid, as to be beyond belief.
I expect the US did it (sold the USSR wheat) because they got paid.
Whatever you may say about the Warsaw Pact countries, it does seem (quite bizarrely) that they took paying things like their Western debts very seriously. Poland, for example, had large loans from Western banks and (to my knowledge) never defaulted.
Just as all these countries had hard currency shops with high end goods for party officials and foreigners (I once went to one in Prague), they did have this strange policy of treating foreigners like VIPs and their own citizens like dirt. Not something you’d ever see in the West … hold on a moment …
Yes it does seem rather “bizarre” that they should have honoured their debts to the “capitalist running dogs” etc.
I was surprised when I heard that HMS Edinburgh was carrying 4.57 tons of Soviet gold, destined for the USA when it was sunk in WWII.
Yet back in 1918 the Bolsheviks cancelled ALL of Imperial Russia’s debts causing a bit of a crisis for the Bank of England.
Yes it does seem rather “bizarre” that they should have honoured their debts to the “capitalist running dogs” etc.
I was surprised when I heard that HMS Edinburgh was carrying 4.57 tons of Soviet gold, destined for the USA when it was sunk in WWII.
Yet back in 1918 the Bolsheviks cancelled ALL of Imperial Russia’s debts causing a bit of a crisis for the Bank of England.
It was credible enemy in terms of military power, global expansion of communist ideology and other achievements (Sputnik etc).
Yes, they were at the expense of population living standards, but as we see in Russia now long term serfs still believe in the project.
I expect the US did it (sold the USSR wheat) because they got paid.
Whatever you may say about the Warsaw Pact countries, it does seem (quite bizarrely) that they took paying things like their Western debts very seriously. Poland, for example, had large loans from Western banks and (to my knowledge) never defaulted.
Just as all these countries had hard currency shops with high end goods for party officials and foreigners (I once went to one in Prague), they did have this strange policy of treating foreigners like VIPs and their own citizens like dirt. Not something you’d ever see in the West … hold on a moment …
It was credible enemy in terms of military power, global expansion of communist ideology and other achievements (Sputnik etc).
Yes, they were at the expense of population living standards, but as we see in Russia now long term serfs still believe in the project.
Actually, they did get some good yield outcomes. It was the distribution from the farm gate to the dinner table that failed miserably. Or even getting the bumper crops harvested
Distribution is one of the main areas where central planning fails – it’s too complex and too distributed for bureaucrats and rule-setters to manage. And of course, open to rorts at every stage.
Distribution requires the legitimate self-interest incentives of all the players involved, and the contractual protection every step of the way by the rule of law
This did not exist in Communist Russia nor current Russia (especially the rule of law – the rule of power and standover remains the main enforcer there)
In post-Deng China, commercial self-interest was allowed to kick in, but contract protection of property rights, while evolving, still stumbled on the rule of law whereby the king and the king’s men needed to submit to it as well as the masses. The CCP beliefs and power structures never quite came to grips with this..
Good yield?
All due to distribution problems?
You really have no clue how communism works.
Or rather doesn’t work.
Whatever you think about current Russia they have no problem with food production or distribution.
Good yield?
All due to distribution problems?
You really have no clue how communism works.
Or rather doesn’t work.
Whatever you think about current Russia they have no problem with food production or distribution.