Comments by "Carey\x27s Corner" (@careylymanjones) on "Zeihan on Geopolitics"
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@SnowRookie India is certainly in a better position, demographically, than China, South Korea, Japan, etc. India has the 20-40 year-olds to have healthy demand. India's problem is that they're relatively poor. If India had the per capita income of say, Japan, it would be a huge market.
India is definitely the best of the BRICS, looking forward. Their demography is better than most. They're close to the Persian Gulf and Australia, giving them good access to energy and raw materials. They have strong borders, protected by oceans and mountains. They don't have the navigable river system that Europe and the US have, but you can't have everything.
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@SnowRookie If you're talking about the effects of external demand on export-driven economies, such as China's, it's fairly straightforward. China produces more than its domestic economy can consume. If China cannot export, its economy collapses. China is dependent on its trading partners having robust demand for its goods. When America (or any other Chinese trading partner) has a decline in demand, China cannot sell as much.
Recessions, or even demographic shifts, can reduce demand. Demand in a country is largely driven by its 20-40 year-old demographic, young adults buying houses and cars and raising kids. Western Europe's baby boomers didn't have large families, so their 20-40 year-old demographic is small, relative to the United States, whose baby boomers did have larger families. America has the largest 20-40 year-old demographic of any developed country.
Export-driven economies, such as China, Japan, South Korea, Germany, etc. NEED access to the US market. No other country in the world can absorb as much imported goods as America. But even if they have free access, if America has a recession, demand will drop, and the export-driven countries will be hurt. And if America becomes angry enough to shut an export-driven country out of its market, that country is in severe economic trouble.
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They're not "30 seconds away from complete collapse", but China DOES have some glaring strategic weaknesses, that make their long-term survival as a major world power doubtful. Recent numbers out of China show twice as many 10 year-olds as 5 year-olds. That's evidence of a fertility crash. Numbers like that mean Chinese women have pretty much stopped having babies. A nation cannot survive, long-term, with fertility rates that low, unless it can attract LARGE numbers of immigrants. Has anybody heard about China having a problem with immigrants crashing its borders? I didn't think so. China's 20-40 year-old demographics have driven Chinese wages up to 15 times what they were in 2000. Foreign companies went to China looking for cheap labor. If Chinese labor is no longer cheap, they will leave China, just as they left the US, decades ago.
When China loses its export dominance to countries like Mexico and India, it will lose the wherewithal to import resources it needs to sustain itself as an industrial nation. Oil is a particular concern. China imports 70-80% of its oil. If it can't afford to import that oil, it can't maintain industrial agriculture. No fuel for farm machinery. No feedstocks for pesticides and fertilizer. Everybody would have to go back to the farms to grow rice the old-fashioned way. Without that industrial workforce, China has nothing to offer the world, and it withers as an industrial power.
And should China lash out at its neighbors, it will only hasten its doom. China's navy cannot protect the tankers that carry 70% of its oil supply. In the event of a war, China ends in about six months, a year, at the outside.
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