Michael Fritzell makes a more nuanced case for China…
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Written by Michael Fritzell.
Geopolitics expert Peter Zeihan has a colourful personality. But during his recent appearance on the Joe Rogan show, he made several arguments that I found hard to swallow.
For example, Zeihan claimed that China will have around 10 years before its economy collapses. Weak demographics, rising labor costs, and increased isolation from the rest of the world all form part of the picture. However, Zeihan also discussed a potential invasion of Taiwan. In such a scenario, US sanctions would then hurt China to such an extent that they would cause de-industrialization and famine.
Further, Zeihan was critical of China’s handling of COVID-19. He pointed out that the population is now vulnerable due to its lack of natural immunity, widespread obesity, and the weak efficacy of the country’s homegrown vaccines.
As someone who has made a living analyzing Chinese equities and China’s economy for the past 15 years, I find Zeihan’s remarks to be, well, off the mark. They don’t paint a realistic picture of the country and where it’s going.
To start, I don’t believe that weak demographics will necessarily lead to a “collapse” of any kind. All that will happen is that economic growth will decelerate as the working-age population shrinks. But it’s going to be a gradual, drawn-out process. And on a per capita basis, the country may well become richer.
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