China's Future is Opaque

Or will it be everything, everywhere, all at once

Experts have little success in predicting the future of China. While the country/empire's fate is tough to predict, is it easier to predict the continent of China?

This is an interesting observation:

If you dropped in to China at any point in its modern history and tried to project 20 years into the future, you would almost certainly end up getting it wrong. In 1900, no one serving in the late Qing dynasty expected that in 20 years the country would be a republic feuded over by warlords. In 1940, as a fractious China staggered in the face of a massive Japanese invasion, few would have imagined that by 1960, it would be a giant communist state about to split with the Soviet Union. In 2000, the United States helped China over the finish line in joining the World Trade Organization, ushering the country into the liberal capitalist trading system with much fanfare. By 2020, China and the United States were at loggerheads and in the midst of a trade war.

One interesting aspect is that while China's future in a generation hasn't been readily apparent, this applies not just to outside observers but to the Chinese themselves. Which is contrary to the notion that China's rulers have some almost mystical ability to make long-range plans. I have long been skeptical of that and my bias was confirmed by one book I read that said of China:

The market mechanism does not function comprehensively to allocate resources, most notably for land, energy, and financial capital. ... Gao [Shangquan, Director of the China Society for Economic Reform] notes that local government officeholders will be in power for only a few years but will auction off land to be used over many decades. The incumbent government will want to see results from land auctions now, even if this means the land will be abused or polluted and therefore lose future value. The same is true for minerals, whose artificially low prices encourage overexploitation. At the same time, the shortsighted governments refuse to make investments in education, public health, or sustainable agriculture because the payoffs from such projects can come only many years into the future, by which time today's officeholders will have moved onto other jobs, in other locales.

But I digress. [But not really]

One prediction long in vogue was that China would maintain its high economic growth rate to overtake America as the most powerful state. I've long doubted the ability of China to maintain its spectacular rise from a low, agrarian base:

I never heard of the Lewis turning point, but I've droned on about it for years, it seems:

Like the old Soviet Union, China’s economic growth is coming from moving peasants to city factories. And even the most productive peasant turned into the most inefficient factory worker will produce more GDP and bump up national statistics. This is not sustainable. Eventually, established workers must become more efficient for an economy to really take off.

I gave up trying to predict when this would catch up with China, but China’s population and economy are not advancing into a glorious Chinese future:

New demographic data on China is rather stunning (tip to Instapundit):

China aged past the point of demographic no return over 20 years, ago and it wasn’t just this year that India became the world’s most populous country, that probably happened roughly a decade ago. And it wasn’t in 2018 that the average Chinese aged past the average American, that was probably roughly in 2007 or 2008.

Huh. I keep reading stuff like this, including that China's economy is grossly overrated:

Is China's GDP overstated by 60%? Big if true. Their defense spending is a much bigger burden, for example. Tip to Instapundit. I've been a skeptic of China's rise to surpass America as many posts show. A decade ago I wondered about the quality of China's growth. Four years ago I mentioned the light metric. And three years ago I noted skepticism of official stats. But I never would have guessed by this much.

Doesn't this throw a monkey wrench into the machinery of our China analysis? Yet nobody seems to adjust the official statistics and everybody just keeps pretending nothing has changed.

The advantage China has from its massive military build up—assuming much of it isn't hollow from lack of training, spare parts, and competent leadership able to wield all that diverse power—is that China can have global impact with a short reach in the western Pacific:

I've been vocal in saying I'd never want to trade places with China. But China can be a threat to us long before they are a superpower with global reach. China is a threat if they can project decisive power 500 miles from their borders, as the simmering crisis between China and Japan over oil deposits in disputed waters shows.

I'm not sure if America's threat to blockade China is more potent than America's reliance on Chinese exports for a host of critical raw materials in a long war.

Although as I think about the geography, I'm not quite as alarmed about a long war reliant on shipbuilding, which China has a huge advantage in.

Okay, I really do digress.

As for predicting China's future? Well, perhaps the problem is that China is a continent masquerading as a country. As a continent, all futures might be possible:

With a state both cruel and failing economically, governing a continent-sized population with a history of fragmentation, I don't know why we need to guess which course the government of China will follow. The continent of China is big enough that it could follow all the possible paths.

The current Communist Party might retain control of Peking region south to the Yellow Sea, Manchuria, and Inner Mongolia in a rump (though still large) People's Republic of China.

Tibet and the Moslem far west could regain independence under local ethnic rule.

The central poor and rural provinces might revert to real Maoism that promises peasants a better deal.

The regions in the southwest, adjacent to Burma, could become simple military dictatorships of varying degrees of harshness and varying connections to the drug trade.

Hong Kong might become a new Singapore with real democracy.

The coastal provinces might become full blown free market economies with either democracy or autocracy, or steps in between.

In a country the size and complexity of a continent, many futures are possible.

China is a single political entity with a history of losing that unity. Even in the modern world, the mountains are high and the emperor is far.

NOTE: I made the image with the Substack capability.