Slavery Can’t Fix China’s Demography

Young Chinese children

To be thorough in our discussion of China’s demographic collapse, we must explore as many potential solutions as possible…even if one of those is a UAE-style model of imported workers (aka slavery).

China is already implementing quasi-slavery to help feed their solar industry, but this barely dents the demographic problem. The scale needed to flip the demographic script just isn’t feasible; we’re talking about importing at least 100 million workers. Any idea where that would come from?

The reality of the Chinese demographic situation is that their traditional system cannot withstand it, but that goes for capitalism and socialism as much as communism. So, new economic models will be ushered in, we just don’t what those will look like yet.

Prefer to read the transcript? Click here

Transcript

Everybody car video today, running errands, and they don’t have time. Anyway, I’ve got a question here that’s come in from the Patreon crowd. And it’s about experimenting with new economic models. So the world that we’re moving into is facing population collapse among people who are under age 55, having places like China, Japan, Korea and Germany and Italy first, and then moving on from there to other places. 

So the question is, how about some models that we generally look down upon because they’re, you know, gauche, like slavery, specifically, could China replicate something like, the United Arab Emirates has done where the population, is basically sustained by a huge imported workforce that does all the serious work. Could you do something like that while the Chinese agent of mass retirement. 

Two problems with that strategy. Number one, they’re already doing it to a degree. Keep in mind that while 90% of the population of China is Han Chinese, there are a number of minorities that haven’t been completely genocidal into nonexistence. And one of them, the Uyghurs of western China in the Zhejiang region are already existing in a degree of slavery. 

They they stationed Chinese Communist loyalists within the homes of people to make sure that people don’t have kids. And anyone who shows any sort of religious inclination, like wearing headgear, for example, or maybe saying a prayer in private is sent off to a reeducation camp, which is basically a work camp. And so almost everyone who has installed a solar panel in the last four years is benefiting from that system on a global basis because the silicon is processed and turned into solar lakes, in Zhejiang. 

And that really hasn’t moved the needle very much. Now, of course, there are only so many viewers versus, you know, ¥1 billion. Which brings us to the second problem is scale, when you’re in the United Arab Emirates and you only have a single digit number of million of Arabs that need to be supported with imported workforce, that’s one thing, especially when you’re drawing people from, say, Palestine or Pakistan or India. 

But there are a lot more Han. And so you would need to import bare minimum cheese. At least 100 million people in order to make a system like that work. And the scale of that just is not possible. And if you look at the countries that border, 

China, there’s no easy source. Russian Siberia is largely unpopulated. 

Everything east of the Urals is under 15 million people. Kazakhstan has of more people than that, but most of them aren’t in the border region. Most of them are further north. You get to Duke of standing Kyrgyzstan again. The eastern reaches are completely uninhabitable. And if you go south, you’re hitting Vietnam. And if the Vietnamese hate the Chinese more than anyone else. 

Myanmar is jungle and mountain, and most of their people are again on the other side of the mountains. And and of course, India is on the other side of the Himalayas, and that is everyone. So, you’d be having to bring in literally tens of millions of people from at least a couple thousand miles away. So the feasibility of that is not great. 

But keep questions like this coming, because we’re gonna have to figure out something as the world the populates the relationships among supply and demand and labor and capital are all breaking down. And the models that we have now, whether it’s fascism or socialism or communism or capitalism, simply aren’t going to work much longer for a lot of countries. 

And the sooner we come up with some other ideas, the better.

These Six Countries Are Running Out of People

kids holding hands

We’ve kicked, flogged, and beaten the snot out of China’s demographic horse, but what other countries are facing a similar demographic decline?

Germany, Japan, and Italy are first on the list. These countries got an early start on industrialization and urbanization thanks to their geography. Thus, rapid aging and population shrinkage was locked in for these WWII Axis powers. South Korea’s rugged terrain meant urbanization was essential, which has translated to them being one of the fastest aging societies in the world.

India and Brazil started down this road much later than the rest of this list, but decades of low birth rates, low fertility, and limited technological upgrades put them in a difficult position. Should these trends continue, they could face severe demographic and economic challenges before reaping the benefits that come along with industrialization.

Prefer to read the transcript? Click here

Transcript

Hey all, Peter Zeihan here. Coming to you from your cemetery park, the northwest part just above Tilden Lake over there. And, it’s chit chat and peek in the back. I’m not sure about that, though. Anyway, taking another question from the Patreon page. 

Aside from China, which has the worst demographics in human history and is looking at societal collapse within a decade. 

What other countries make your top ten list? Let me give you six. How about that? Just one video. The first three, are the countries that industrialized first and urbanized heavily first. And they are Germany, Japan and Italy. 

The situation all three of these countries is that they were among the first countries to pick up the industrial technologies and get what they needed to go into urbanization in a very big way. 

It happened in Germany very, very quickly because Germany used to be a series of a number competing regions. And so when all of a sudden they got electricity and rail, it was very easy for these regions to each set up their own node. They tried to compete with one another a little bit. We had a series of conflicts in the 1800s, and eventually we got the urbanized Germany that led into the world wars, in Japan, very similar. 

The region’s topography is very, very rugged. So as soon as the technologies were available for people to live better, they chose to and they moved into high rises. Italy’s a little different. Italy’s population is concentrated in the Po Valley. And if you remember your Machiavelli, Italy is a series of, again, competing city states. And so once you got the technologies to go up instead of out, everyone did it anyway. 

These three countries, their geographies and their political history is really meshed with industrial technologies. You will notice that all three of these were the axis powers in World War two. That is not a coincidence, because when these countries started to urbanize and industrialize, they got a burst of national power that they used, perhaps unwisely. But that’s not a coincidence. 

Next country down is Korea. Korea is the head of the what they used to call the mix. The newly industrializing countries of East Asia. 

Korea’s geography is a little bit like Japan’s in that it’s very, very rugged. And people live on a few chunks of flat land. And so when industrial technologies came about, you could move from rice farming into a high rise. 

And that was kind of a no brainer for most people. In addition, they had so little land that once they got the industrial technologies, they were able to reclaim land from the seas. And those again went straight up. as a result, with the exception of China, Korea is arguably the fastest aging society in the world now. 

The next two are countries that I’m not worried about now. But if things don’t change, right, I’m going to be worried about them. Very much so in 20 or 30 years. Not that that’s going to be my problem at that point. But anyway, and those are, Brazil and India. Now, these are countries that came late to the game. 

They didn’t really start seriously industrializing until the 1980s, early 1990s. But because the path has been paved and all the technologies have had been invented, they were able to adapt those technologies very, very quickly, urbanize very, very quickly. And so as a result, their birth rates are significantly below the United States at this point. If they keep aging at their current position, they’re not going to enter a Japanese style crisis until like 2070. 

I mean, there’s still a lot of time for this to go a different direction, but we’ve already had 40 years of record low birth rates for both of those large developing countries, and unfortunately, they have not moved up the value added scale like, say, the Germans or the Japanese or the Koreans have in the time that it’s taken them to industrialize. 

So if, if if nothing changes on the birth rate front, those two countries will be looking at, demographic degradation without the attendant increase in technological prowess, skilled labor, or standard of living. So, you know, if you’re in India or if you get in Brazil, chop, chop. You got some work to do. Yeah. That’s top six. 

Okay. That’s it. See you guys on the other side of the lake.

The Future of Bolivian Lithium

photo of lithium

Bolivia is in the midst of a political reshuffling that could alter its minerals future.

For decades, Bolivia’s socialist government has kept the country poor and starved of foreign investment. On top of that, the complex internal political situation between the indigenous population (who live in the regions containing these vast lithium reserves) and the rest of the country, makes accessing these minerals complicated.

A more market-friendly government may embrace foreign investment, but that could upset local communities. Even if they can figure that out, the Bolivians couldn’t have chosen a more challenging time; global demand is entering a lull driven by unsteady US industrial policy and Chinese demand for raw minerals is fading.

Prefer to read the transcript? Click here

Transcript

Hey, Peter Zeihan here. Coming to you from lake, Monona terrace here in Madison, Wisconsin. The land of cheese curds. There is the Capitol back there. Today we’re talking about a country that does not come up often, and that is Bolivia. They recently had a pretty significant shift in their electoral system, it’s resulted in a significant shift in political alignments. So back going into the early 2000, Guy by the name of Evo Morales came in who was a poor coca farmer, became president. Started Bolivia on a path towards what they call socialism. It’s really, low grade populism. 

And I don’t want to say he drove the economy into the ground, because that would imply that most of Bolivia was doing well before. But he certainly didn’t leave the place better than he found it. We’ve had 20 years of governments that were of Evo Morales or people like him. And the country, was already functionally the poorest of the major states in Latin America. And it’s still in that position. Bolivia is split into two chunks. And that’s part of the problem. 

You’ve got the lowlands in the east that are basically an extension of the agricultural zones of Brazil. About one third of the population lives there, mostly European descent. It’s mostly an agro industrial economy, not the most productive on the planet, but still you know, it’s a hungry world. So you produce agricultural exports and it does. Okay. The upper two thirds are indigenous. 

And the reason the indigenous live in the upper two thirds is they were killed everywhere else. The Native American experience in South America is not significantly better than the one in the United States. In most places, Bolivia is only a partial exception, because when you move upland, what we discovered, what humans discovered throughout the 1415, 1617 and 1800s is that the locals were able to reproduce and women were able to give birth at 12,000ft, whereas the Europeans cannot. 

And that singular biological difference. The people who had adapted to that before the Columbian Times, were basically able to populate this zone. Bolivia had a number of very, very, very, very, very, very stupid governments in the 1617 hundreds, in the 1800s. And they generated one of the original rules of Latin America is that no matter how many wars you lose, you can still beat Bolivia. 

And you can also count on them to pick the fight. So Bolivia lost a lot of territory, was basically reduced to what it is today. And most of the land is of limited use. That doesn’t mean that in the modern times it’s of no use. 

In some ways, what’s going on? Bolivia is a little similar to what we have in the United States. In the United States, we’ve been mining the country since formation, since a little bit before formation. And so most of the really good metal deposits have been mined out. And as we enter a world where we know, we know we need different sorts of materials, most notably things like rare earths or lithium. 

We’re going into places that we really haven’t mined before, and there are very, very few of those. And most of what they are are on or near Native American lands, which in the United States, for the most part, are reservations. Now, the native population in the United States is only about 1% of the total, and all of their lands are directly controlled by Congress and the Bureau of Indian Affairs. 

So if the federal government decides to force the issue, it can’t. That’s not how it works in Bolivia and Bolivia. Those zones are where two thirds of the population live, two thirds of the population is native. And you can’t just wave an administrative wand and make it happen. So it requires a lot more negotiation, and the local communities have a lot more say in how it goes down. 

As a result, under the governments of Evo Morales and his successors, we basically had the federal government in Bolivia say that any sort of extraction had to involve the federal government as well as local groups, and that created such onerous terms. Really, no one played the Russians and the Chinese, you know, toyed with the idea, but really we’ve had no meaningful production. 

And Bolivia is part of the lithium triangle that connects Bolivia, Argentina and Chile. So there is no doubt that the minerals are there. Just the legal structure to get them out has not existed. 

Give you an idea of just how far behind how backwards Bolivia is in this regard. Argentina, where foreign investors are actively penalized. And it’s discussed publicly, has significantly more foreign investment in their space and development of the lithium fields than Bolivia does. 

Basically, less than 1% of the world’s lithium comes out of Bolivia, despite them having arguably the best deposits on the planet. So with this new government, will this change what might have having a federal government that is more pro-market is probably going to take us into a different direction, but it’s not going to obviate the fact that two thirds of the population still lives in the zone that controls the political decisions that are required, so we’re more likely to get a lot of civil unrest if we move in the direction of greater mineral extraction. 

There’s one other thing to keep in mind. One of the reasons why Bolivia did okay during the last 20 years is commodity prices have been pretty high because the Chinese basically hoovered up everything, and that allowed a little bit more production to come out of Bolivia than normally would have. We’re now kind of in this moment where we’re hanging. 

The Chinese are still churning along, building stuff, but the demographic situation is atrocious, and they’re not going to be with us a lot longer. At the same time, we’ve got the United States where there seems to finally be this economic and political understanding that we need to do a massive re industrialization program. But we have a government that is actually penalizing people who do things in that direction with state ownership or with tariff policy. 

So we’re kind of hanging right now. The trends up Demand of the past are fading very fast, and the trends of Demand of the future haven’t really taken hold with policies that are going to really encourage them. And that means we’re at this soft point for commodities where the Bolivians are trying to make decisions. So they’re making the decisions about the right things at the right time, but they don’t yet have the economic impulse that would make it really, really stick. So tough times for the Bolivians. Let’s see what happens on the other side of this flip.

Regime Change for Venezuela

The Flag of Venezuela

The Trump administration is sending the USS Ford, America’s most powerful supercarrier, to the waters off Venezuela. It’s an unprecedented move that could signal a coming regime change. Let’s break down what this means.

To watch our previous video discussing what a Venezuelan incursion might look like, here is the video link.

Prefer to read the transcript? Click here

Transcript

Hey, all Peter Zeihan I’m here coming to you from Colorado. And it looks like the Americans about to knock off a government. The Trump administration has just ordered the USS Ford Super carrier to the waters off of Venezuela, from where it currently is in the Mediterranean. The ford is probably 60%, 100% more powerful than the Nimitz super carriers that have been the backbone of American power for the last 50 years. 

It hasn’t been bloodied in a real fight yet. So this is going to be interesting from any number of angles, but, you don’t send a super carrier somewhere in the Western Hemisphere unless you really have something important to do. The last time an American super carrier was involved in an operation in the Western hemisphere was in 1983, the Grenada operation, where I would argue it was overkill. 

That was an old forester, Forrestal class. This one is much, much, much, much, much bigger. Before that, I mean, let’s see, carriers were involved in the Cuban Missile crisis, but nobody ever shot at anyone there. And, and that’s it. So unprecedented by any number of matters. You could make the argument. Maybe the Trump administration is just trying to intimidate the government of Venezuela, which is led by President Nicolas Maduro. 

There are a lot better sticks for that, I would argue. Keep in mind that over the last few weeks, the United States has not just been going after what the, government of the United States says are drug boats, but is also said publicly that the CIA has kind of been let loose to carry out operations in the country. 

There is already, the USS Iwo Jima, which is a wasp class amphibious assault vessel, which in any other part of the world would be called a supercarrier. But for the United States, these are smaller carriers that also just happened to carry a few thousand Marines. So if you have a supercarrier in order to do strategic overwatch and air bombings, and you have the Marine Expeditionary Unit based on the EO jima, that is going to do, land incursions, this is how you knock off a Latin American government in a weekend, and it probably will only take that amount of time. 

Now, whether this is a good idea or not, push that to the side. Whether Congress is going to be notified, push that to the side. There’s a lot of details here that under normal circumstances, the American political system would be debating and discussing. We are not going to see that this time around because Donald Trump, at least at the moment, still has a lock on the Republican Party in Congress. 

And I really don’t see Congress doing anything unless and until we actually see American soldiers and body bags and this sort of operation. This should not be hard. The government of Nicolas Maduro is really just a couple of dozen dudes, and getting rid of them should be very, very easy. With the assets that seem to be steaming into the region, does that mean the next day will be pretty? 

No. This will probably trigger some sort of civil war and state collapse. The few thousand Marines that are on, I mean, you are nowhere near enough to impose a reality on the ground in Caracas, much less the wider world. We did a video a couple of weeks ago about what it be like to be to impose rule on Venezuela. 

We will share that video again. You don’t want to get involved with that. So this seems like a bomb it and forget it situation. Keep in mind that the Maduro government is so incompetent that they mismanaged selling crude to get dollars to buy food, to feed their people to such a degree that the average Venezuelan a few years ago lost 20 pounds in oil in a year, full on famine. 

You remove the government. That’s probably the only way you could make something worse. So last time that encouraged almost one third of the Venezuelan population to flee the country to avoid famine. We’ll probably see something on that scale again in the months to come. Should this be what the Trump administration has planned?