Post-COVID China: Will the Economy Bump or Slump?

As countries across the globe peeled back COVID restrictions, many of those economies saw huge (and much-needed) bumps. With China approaching six months since lifting its lockdown, the question on everyone’s mind is why hasn’t the world’s second-largest economy seen an economic bump?

I won’t hold my breath, and the Chinese shouldn’t, either. There is simply too much going on in the Chinese system for reopening to fix everything magically. Between countries pulling their manufacturing needs from China in favor of reshoring, a growing anti-China sentiment, and a terminal demographic situation…China isn’t looking so hot.

It shouldn’t come as a surprise to anyone that China isn’t going to be getting a post-COVID bump. In all likelihood, they are probably going to experience an economic slump.

Prefer to read the transcript of the video? Click here

Here at Zeihan On Geopolitics we select a single charity to sponsor. We have two criteria:
 
First, we look across the world and use our skill sets to identify where the needs are most acute. Second, we look for an institution with preexisting networks for both materials gathering and aid distribution. That way we know every cent of our donation is not simply going directly to where help is needed most, but our donations serve as a force multiplier for a system already in existence. Then we give what we can.
 
Today, our chosen charity is a group called Medshare, which provides emergency medical services to communities in need, with a very heavy emphasis on locations facing acute crises. Medshare operates right in the thick of it. Until future notice, every cent we earn from every book we sell in every format through every retailer is going to Medshare’s Ukraine fund.
 
And then there’s you.
 
Our newsletters and videologues are not only free, they will always be free. We also will never share your contact information with anyone. All we ask is that if you find one of our releases in any way useful, that you make a donation to Medshare. Over one third of Ukraine’s pre-war population has either been forced from their homes, kidnapped and shipped to Russia, or is trying to survive in occupied lands. This is our way to help who we can. Please, join us.

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TRANSCIPT

Hey everyone. Peter Zeihan here, still in Monterey. That’s my plane right there. We just got delayed for another hour. Anyway, on the topic of waiting, where is this ridiculous idea of a COVID recovery for the Chinese? I mean, come on, it’s been six months. I would argue that you really shouldn’t wait for it any longer. There’s a number of things that are going on that are structural for the Chinese system, that aren’t going to be fixed by anything as minor as reopening.

Most Chinese economic growth has been caused over the years by either investment in industrial plant to serve external markets or the production of goods to serve those external markets. So basically, think of offshoring onshore. That has been a lot of the growth story and especially the technological advance for these past 20 years that has probably peaked.A few things…

Number one, the world and especially the United States, has turned sharply anti-Chinese when it comes to investments. And so there’s a lot more effort to do things with friends or at home or at least nearby. Biggest beneficiaries of that so far have not just been the United States, but Mexico and Vietnam. Nothing’s changed there.

Second, the production costs in the United States system in terms of energy and labor productivity. Everything is lower than they are in China. So there are very, very few industries that have tried to move out of China back to the United States and discovered that it’s been anything other than a wondrous experience.

And third, there’s a personal, personal angle here where you’re going to drop $1,000,000,000 in a country in order to do a big investment. You know, you kind of go and scouted around first. And because of COVID, no American CEOs went to the country for the entirety of calendar year 2020, 2021 or 2022. If they did, they were subjected to the joys of literally an Eagle probe to check them for COVID. We like to call this an economic parlance, a non-tariff barrier. Well, the average turnover for an American CEO is five years. And if for, three-three and a half years, you couldn’t even get there. Well, the personal connection where CEOs would link their personal performance professionally to some sort of activity in China, well, that’s that’s all gone. And so we’ve seen interest at the corporate level drop as well.

On top of that, it’s turning out that the Chinese demographic picture is significantly worse than anyone thought. Worse than the Chinese thought. And it’s not so much that the Chinese population became older than the average American in 2018 and was passed by by the Indian population in 2022. But those milestones probably happened a decade ago. If you look at the new data that’s coming out of the Chinese, so the economic case isn’t there.

The personal case isn’t there, the investment case is it there? And that’s before you consider the Chinese have kind of become a bag of dicks in international diplomacy, this whole wolf warrior approach has soured a lot of people and made it less likely for Chinese tourists to be welcomed and less likely for countries to be interested in seeking that at all.

So when you look at flights in and out of China to other countries, the global average is only about 40 to 50% of pre-pandemic levels. So there hasn’t been that kind of burst of revenge tourism that we’ve seen in a lot of places and flights to and from the United States where the business has done. That’s only 6% of pre-COVID levels.

So we’ve had a significant shift of mindsets on all sides. And with the demographic collapse, meaning that consumption led growth was never possible again in China at bulk. Anyway, it really shouldn’t be a surprise that the Chinese are proving unable to have a post-COVID bump, which means we’re very close to a post-COVID slide, assuming nothing else goes wrong and a lot of other things are going wrong.

All right. See if I have another delay here…

Finally boarded. Oh, yeah. One more thing. We don’t know how many people, all right? We don’t know how many people died in China’s COVID experience. So I’m assuming that the anti-vaxxers are right. And this has never been worse than a common cold. That was a million people dead. People don’t spend money.

People who survived dead people tend to be kind of down in the dumps for a little bit of time. So the idea that there was ever going to be a big economic boom with China opened kind of throws in the face of, you know, logic and emotion, demographics and trade and a few other things. Anyway, I’m finally moving now from home by.

Trusting the Numbers in a Deglobalized World

To my fellow nerds reading along…this is your trigger warning…today we’re talking about BAD DATA. Sorry for the dramatics, but I’m sure many of you share my frustration when you can’t find the correct numbers for that forecast you’re working on or, even worse, the data you used in your model is falsified.

Unfortunately for us, this problem is only going to get worse. We know that the numbers coming out of Russia and China haven’t been “trustworthy” for years, but at least we could check most of it. At least now we don’t have to worry about data manipulation because both countries decided they wouldn’t collect or report it…

The increasing struggles of data reporting aren’t isolated to autocracies either. As the global trading system breaks down, most of the world will be hit with paralyzing inflation and trying to track it would be a fool’s errand. Until the gaping vulnerabilities left in the global trade system are patched, this will continue raging on.

Some countries will fare better than others, but no one is getting off scot-free. The modern world’s economic model is crumbling, and someone will have to figure out what we all do next.

Prefer to read the transcript of the video? Click here

Here at Zeihan On Geopolitics we select a single charity to sponsor. We have two criteria:
 
First, we look across the world and use our skill sets to identify where the needs are most acute. Second, we look for an institution with preexisting networks for both materials gathering and aid distribution. That way we know every cent of our donation is not simply going directly to where help is needed most, but our donations serve as a force multiplier for a system already in existence. Then we give what we can.
 
Today, our chosen charity is a group called Medshare, which provides emergency medical services to communities in need, with a very heavy emphasis on locations facing acute crises. Medshare operates right in the thick of it. Until future notice, every cent we earn from every book we sell in every format through every retailer is going to Medshare’s Ukraine fund.
 
And then there’s you.
 
Our newsletters and videologues are not only free, they will always be free. We also will never share your contact information with anyone. All we ask is that if you find one of our releases in any way useful, that you make a donation to Medshare. Over one third of Ukraine’s pre-war population has either been forced from their homes, kidnapped and shipped to Russia, or is trying to survive in occupied lands. This is our way to help who we can. Please, join us.

CLICK HERE TO SUPPORT MEDSHARE’S UKRAINE FUND

CLICK HERE TO SUPPORT MEDSHARE’S EFFORTS GLOBALLY

TRANSCIPT

Hey everybody. Peter Zeihan here coming to you from breezy, chilly California. And today we’re going to talk about statistics. Yes, yes, yes, I know, but it’s a lot better than it sounds. So I can’t do anything that I can do with analysis, much less forecast without decent data. And in some countries, that’s just more difficult to do than others. I’m not talking here about like bureaucratic interfaces or anything. I’m talking about just outright lies. So the two countries that have always been a bit of a black hole when it comes to the data are China and Russia.

In the case of China, the lies are primarily of choice. So you’ve got individual local leaders who are pumping up their own numbers to get more money from the federal government or in order to curry favor. So if the government says we want 6% growth, they’ll get six and a half. But some of it is just outright greed. The point where the Chinese system admits that you’re a person and starts to count you is when you enroll for kindergarten. Basically. So local governments have bumped up the number of people who have enrolled in order to get more cash. You play that forward for 40 years. The Chinese are now admitting that they’ve overcounted their population by in excess of 100 million people. And this is a big part of why China today is now in terminal economic decline. They just don’t have the people anymore. And they didn’t see it coming because the numbers told them otherwise.

In the case of Russia, it’s more a classic one-upmanship. There’s a general belief among Russian bureaucrats that they have to be better than the United States, even if they have to completely fabricate everything. So my personal favorite statistic out of Russia is that the Russians see that roughly one fifth of American agricultural land is irrigated. So in Russia, 25% is irrigated because 25% is more than 20%. That makes us better than you, which is, of course, you know, dumb, because if you’re irrigating land, that means you have to pay for it. And it’s usually not as efficient anyway. This has always been a challenge. We normally deal with this by evaluating counterparty. So if the Chinese say export some product, what’s called electronics to other countries, then you look at the import data for those other countries and you use that to back up to estimate how much came out of China. Same with the Russians.

What we’re seeing now with the Ukraine war and the onset of sanctions at volume is that the Russians are no longer lying about their data. They’re just not reporting it at all. And in the case of China, they’re not just lying about the data. They’re in many cases not collecting it. So a good example of that very, very recent just the last few weeks is with COVID. Now, Chinese data on COVID has always been nudge, wink, questionable, but they just stopped collecting it all after their opening. And you can kind of see why. I mean, let’s assume for the moment that the anti-vaxxers and the conspiracy theorists among us in the United States have actually been right all along. And COVID is no more dangerous to you than the common cold. Well, if that is true, China still lost a million people in the last several weeks as COVID spread through the population for the first time. It’s probably almost certainly sickness, acutely worse. And if the Chinese don’t collect the data and you have an information closed society, then no one knows. But I don’t want to just pick on the autocracies out there because the whole world is going to have a problem with data moving forward.

A couple of things. First, if you’re talking about a breakdown of the global trading system, we are going to have spasms in inflation as some products get produced in some zones but can’t get to others for assembly or raw commodities can be produced somewhere but can’t get shipped everywhere. Every part of the world is going to have different inflationary, deflationary and disinflationary trends, different from not just product to product, but component to component. And keeping track of that, much less putting it into an index is going to be a fool’s errand. We’re just going to feel the term of product shortages across the entire system. And until you can home shore or nearshore or friend shore, in that order, the component production themselves, the material processing itself, it’s not going to go away because it’s going to be vulnerable to security interruptions.

Second, most of our economic laws and rules and understanding are rooted in the idea that the economy gets a little bit bigger every year, not necessarily from technological advancement or economic growth classically, but simply from populations expanding. If you have more people every year, you have a little bit more consumption every year. You have a little bit bigger economic pie every year. Only that’s no longer true. In the aftermath of World War Two, the whole world started to industrialize, which is another way of saying the entire world started to urbanize. And as you move from the farm and into town, you have fewer kids until you get to modern day, say, China, where in the cities you’re averaging now less than one person per woman for her lifetime.

After 75 years of this process, we are now well past the point that the advanced countries are repopulating. China is on that list and over the course of the next 10 to 20 years, a lot of the advanced industrial world places like Korea are going to follow suit, which means that the pie is not getting bigger, which means that the tools we’ve developed, the theories we’ve developed, the monetary policy that we’ve developed is no longer appropriate for the world that we’re in. It is going to take us years, if not decades, to come up with a replacement system and replacement rules and replacement understandings and theories and especially policy tools to adapt to this. North America gets a bit of a pass. First of all, the Mexicans have the healthiest demography, not just in the rich world, but in their own peer class, better than India, better than Brazil, better than Turkey and the United States. We have one of the highest birth rates in the world among the rich countries and now higher than many advanced developing countries as well. And at current rates of aging, we will actually be younger than the Brazilians in the mid-twenty forties and younger than the Indonesians around 2050. So we’ve got time. Canada doesn’t have that kind of time, but Canada has gotten clever and has a cheat code and basically has embraced immigration as a national identity issue and so they’ve been able to import a huge number of people in their twenties and their early thirties, in a way that they haven’t done before. And that’s bought them time by importing an entire generation. That means North America is at least partially resistant to these trends, and the countries of North America are not going to have to be the ones to pioneer a fundamentally different economic model simply to preserve their societies. We can wait, we can watch, we can learn.

Anyway, that’s it for me. I’ll see you guys next time.

COVID: What Really Happened in Wuhan?

In early 2020, reports of a virus sweeping across the globe hit the headlines. But where did it come from? How did it start? This week’s news is that the Department of Energy released a low-confidence statement that COVID originated from a lab leak within the Chinese System.

Was there a breakthrough in the evidence? Did they find the smoking gun everyone has been looking for? No. And much of the scientific community still believes this was a Mother Nature special and just jumped from a different species to humans.

So without any concrete evidence, why has a chest-thumping-contest broken out in the American political system over who hates China the most? Regardless of the origins of COVID, the Chinese knew there was a breakout in Wuhan. They shut down all domestic flights in and out of the region, but you know what they didn’t stop…International flights. They intentionally let the virus spread across the globe.

Prefer to read the transcript of the video? Click here

Here at Zeihan On Geopolitics we select a single charity to sponsor. We have two criteria:
 
First, we look across the world and use our skill sets to identify where the needs are most acute. Second, we look for an institution with preexisting networks for both materials gathering and aid distribution. That way we know every cent of our donation is not simply going directly to where help is needed most, but our donations serve as a force multiplier for a system already in existence. Then we give what we can.
 
Today, our chosen charity is a group called Medshare, which provides emergency medical services to communities in need, with a very heavy emphasis on locations facing acute crises. Medshare operates right in the thick of it. Until future notice, every cent we earn from every book we sell in every format through every retailer is going to Medshare’s Ukraine fund.
 
And then there’s you.
 
Our newsletters and videologues are not only free, they will always be free. We also will never share your contact information with anyone. All we ask is that if you find one of our releases in any way useful, that you make a donation to Medshare. Over one third of Ukraine’s pre-war population has either been forced from their homes, kidnapped and shipped to Russia, or is trying to survive in occupied lands. This is our way to help who we can. Please, join us.

CLICK HERE TO SUPPORT MEDSHARE’S UKRAINE FUND

CLICK HERE TO SUPPORT MEDSHARE’S EFFORTS GLOBALLY

TRANSCIPT

Hey everybody. Hello from California. I just want to take a couple of minutes real quick to talk about the news this week. We’ve got a number of folks in the United States government who are taking a firmer stance on China, on COVID related history. Specifically, the Department of Energy is now saying with low confidence that it believes that COVID originated in a lab leak out of the Chinese system. And the director of the FBI concurred with the general statement that this is the bureau’s standing position.

Couple of things real quick. First, don’t blow it out of proportion. Low confidence means that there’s actually no smoking gun or firm evidence of any kind. It just means that this is the opinion of the agency and there’s a lot of circumstantial evidence that points in that general direction. There’s no new breakthrough. There’s been no information brought to light that indicates that the lab leak is indeed where COVID came from. And as a rule, about two thirds of the American intelligence community officially is on the position that this is a 100% Mother Nature special, that jumped from one species to humans, somewhere in the Wuhan area. So there’s really no movement in terms of policy here or in terms of information.

I will outline two things. Number one, the Department of Energy in the FBI are as a rule, not known for medical expertise. So when they come out and say things like this, you should take it. Not so much with a grain of salt. Just put it in the context. Second, no one has any information or smoking gun or evidence pointing to it not being a lab leak. So while the general position of the scientific community is, it would probably jump from animal to human, that doesn’t mean that we know that that is what happened. It could be either way.

Now, a couple of things here. First of all, politics. There is now a competition across the American political spectrum as to who is going to be more anti-Chinese. And so there are resolution after law after amendment across Congress to prove that the Republicans or the Democrats happened to be the ones that hate China the most. Gone are the days that the business community was even part of this conversation, and now it’s all political and everyone is competing to see who can beat their chest the most. That should be your first big take away that relations with the Chinese. On the American side of the equation are breaking down because they no longer have a defender, they only have attackers. So whether you like Trump or Biden or hate Trump or Biden, everyone has decided that they don’t like the Chinese very much. That’s number one. What’s number two?

Oh, yeah. There’s plenty of reasons why we should still be mad about the Chinese, even if it’s not a lab leak. So the lab leak theory is based on the idea that either through carelessness, negligence or accident, it leaked out. So accidental being the key word there. And obviously, if the Chinese did allow it to escape from a lab and hushed up, that is bad. But that is ultimately accidental. What we know for sure, what there is no dispute of what have been the Chinese admit publicly is that for the two weeks after the Chinese realized they were dealing with a respiratory pathogen in Wuhan, they banned domestic flights to and from Wuhan, but they allowed international flights to continue to and spread the virus worldwide.

The lab leak would be embarrassing, but what we know for certain was that the Chinese intentionally allowed the virus to spread globally. And from my point of view, that means it’s perfectly reasonable for the Democrats and Republicans to compete as to who is more anti-Chinese these days. Alright. That’s it for me. Until next time.

WEBINAR—Global Outlook: One Year Into the Ukraine War

One of the most commonly asked questions I get is “How can I attend one of your speaking engagements?” So here’s your chance. On February 17th at 2:00 pm CST, I’ll be hosting a Webinar to discuss the Global Outlook One Year into the Ukraine War. We’ll dive into the global impacts the war has had on supply chains, agriculture, and much more. After my presentation we’ll have a Q&A portion to answer all those burning questions.

Those who attend the webinar will have *exclusive access* to a recording of the event, as well as all of my slides, charts and graphs used throughout the presentation.

Can’t make it to the live presentation? No problem! All paid registrants will receive access to the recorded webinar and presentation materials to review at their own convenience.

How Not To Handle COVID: Chinese Edition

With any infectious disease, there are two main factors to consider: the average number of people an infected person will infect and lethality. Even with accurate data and reporting, these take time to figure out. But if a country (ahem, China) decides to just STOP collecting the data…well then…oh boy.

Until now, the Chinese have been <<ok-ish>> at collecting COVID data but horrible at reporting it. Throw in nearly a billion people who have been exposed, and China’s new COVID policy is to simply stop collecting the data. Brilliant.

Now, this could have devastating impacts not only on the Chinese but on the rest of the world. OR it could be nothing…I guess we’ll have to wait and see.

Prefer to read the transcript of the video? Click here

Here at Zeihan On Geopolitics we select a single charity to sponsor. We have two criteria:
 
First, we look across the world and use our skill sets to identify where the needs are most acute. Second, we look for an institution with preexisting networks for both materials gathering and aid distribution. That way we know every cent of our donation is not simply going directly to where help is needed most, but our donations serve as a force multiplier for a system already in existence. Then we give what we can.
 
Today, our chosen charity is a group called Medshare, which provides emergency medical services to communities in need, with a very heavy emphasis on locations facing acute crises. Medshare operates right in the thick of it. Until future notice, every cent we earn from every book we sell in every format through every retailer is going to Medshare’s Ukraine fund.
 
And then there’s you.
 
Our newsletters and videologues are not only free, they will always be free. We also will never share your contact information with anyone. All we ask is that if you find one of our releases in any way useful, that you make a donation to Medshare. Over one third of Ukraine’s pre-war population has either been forced from their homes, kidnapped and shipped to Russia, or is trying to survive in occupied lands. This is our way to help who we can. Please, join us.

CLICK HERE TO SUPPORT MEDSHARE’S UKRAINE FUND

CLICK HERE TO SUPPORT MEDSHARE’S EFFORTS GLOBALLY

TRANSCIPT

Hello from Sunny Calgary. I just wanted to take the opportunity today to a quick update on what’s going on with COVID in China. I think the biggest thing to underline is we really don’t know what’s going on. China has always been an information control space, but they have always been pretty good at collecting data, just not necessarily reporting it.

Yes, there have been problems with the data collection, but what they share with the world just doesn’t match what they see internally. And that’s one of the reasons why a lot of folks like me just don’t trust the data at all. But what they’ve done with this opening due to COVID, this is change the policy completely. Instead of collecting data and lying about it, they’re just not collecting it.

So, you know, supposedly only a few dozen people have died in total from COVID the last couple of years. They were reporting officially back in December that they had a few thousand new cases. But we know now that the new case tally is in excess of a couple of million a day. Some independent estimates say it’s in over 20 or 30 million.

We also don’t know much about the virus and this is where things get a little scary. COVID, it changes relatively rapidly. We’ve been seeing new variants every few months. But in China, now that we have over a billion people who have been exposed all at once, it’s a different sort of scenario. So you can certainly argue that very few countries in the world got it right when it comes to managing COVID. I mean, we’ve all kind of been making this up as we go along because the goalposts keep moving. And whether you believe in natural immunity or vaccinated immunity, most people who are willing to, you know, not be morons about it will admit that people on the other side have a point that is worth considering. This hasn’t been in play in China.

The Chinese vaccines have been proven over and over and over again by almost every country that has tried to use them to be broadly ineffective at preventing COVID. And so most countries that originally started using the Chinese formulas have switched to other formulas that come from different countries. India does their own. Obviously, the Western countries have their own, the Russians have their own. And, you know, some of these are better than others, but the Chinese are definitely at the bottom of the barrel. And so they’ve pretty much vanished from global use. The Chinese also aren’t going to have an mrna formula for at least a couple of years, or at least not one that’s probably ready for primetime. So that’s an issue for another day rather than the outbreaks that we’re seeing in China right now, which means what’s going on in China is something that’s very difficult to predict.

There are two factors when it comes to cover to really any pathogen. First of all, you need to know it’s R0 and that’s the number of people on average that each infected person will then contaminate. And then the second thing, of course, is lethality. What’s your chance of actually dying from this thing? Now, it takes time to figure that out because you first have to wait for the virus to mutate and then you have to wait for it to get into a general population.

And then you have to collect the data and then you have to wait to see if people are going to die. You collect that data, too. So on average, from the point that a new variant emerges to the point that we have a decent grip on how communicable and how lethal it is, it’s usually around six months. And that’s one of the reasons why policy across the world has been so schizophrenic.

Because policymakers are attempting to figure out what to do for health policy before they have the data. And if you wait until after you have the data, you know, you may have lost a few hundred thousand people already. And we’ve seen that time and time again around the world. Now, the Chinese are struggling with this at the moment, just like everybody else, just on a much grander scale, because so few people in the country have any sort of real resistance.

Until recently, no one’s had COVID. And then, of course, the vaccines are not all that great. But for the rest of us, China choosing to not share data, but China choosing to not even collect data means that we can have literally millions of deaths in China and the rest of the world doesn’t know what to get ready for.

We can’t even begin the process of understanding what the new variants that are circulating in China are going to mean for the rest of us. So we know there are at least seven different variants. We knew that back in December. We also knew that at least two of those variants didn’t exist 2 to 3 months previous. So the only data that has existed was back in December, before this all blew up, when the Chinese were still lying about everything.

Now they’re not even collecting the data, so we are not going to have a good idea of what we’re going to be struggling with until six months after this virus breaks out of the Chinese population and into the global commons. 

So it could be nothing. Maybe this is the most mild variant yet. Could be horrible. This could be the most lethal variant yet. We just don’t know. And we won’t know for months. Blehhh.

COVID: China’s Problem Child

A COVID situation is brewing in China and an outbreak of grand proportions is imminent. Unfortunately, the Chinese medical and political systems are wildly unprepared for what’s about to happen.

To give you some perspective, imagine 3 years of exposure condensed into 3 weeks, close to no natural immunity and vaccinations that aren’t worth diddly…it isn’t hard to picture how this will play out.

The impacts will spill out of China, but not in the form of Covid. Chinese manufacturing capabilities are already in the danger zone, and the fat lady won’t be singing anytime soon.

Here at Zeihan On Geopolitics we select a single charity to sponsor. We have two criteria:
 
First, we look across the world and use our skill sets to identify where the needs are most acute. Second, we look for an institution with preexisting networks for both materials gathering and aid distribution. That way we know every cent of our donation is not simply going directly to where help is needed most, but our donations serve as a force multiplier for a system already in existence. Then we give what we can.
 
Today, our chosen charity is a group called Medshare, which provides emergency medical services to communities in need, with a very heavy emphasis on locations facing acute crises. Medshare operates right in the thick of it. Until future notice, every cent we earn from every book we sell in every format through every retailer is going to Medshare’s Ukraine fund.
 
And then there’s you.
 
Our newsletters and videologues are not only free, they will always be free. We also will never share your contact information with anyone. All we ask is that if you find one of our releases in any way useful, that you make a donation to Medshare. Over one third of Ukraine’s pre-war population has either been forced from their homes, kidnapped and shipped to Russia, or is trying to survive in occupied lands. This is our way to help who we can. Please, join us.

CLICK HERE TO SUPPORT MEDSHARE’S UKRAINE FUND

CLICK HERE TO SUPPORT MEDSHARE’S EFFORTS GLOBALLY

Where in the World: The Turner Cascade and COVID

I hate COVID so very, very much. Not only has it (bizarrely) become a new third rail in American politics, but its international nature has also accelerated many global trade and diplomatic disputes which were already dissolving the globalized era. The virus hasn’t simply robbed us of lives, but also of time. And as I say repeatedly in multiple contexts in my new book – The End of the World is Just the Beginning: Mapping the Collapse of Globalization – time is the most valuable thing we have.

There are any number of aspects of COVID that are worth discussing, but I’m attempting to stick to my tried-and-true approach of pissing off everyone. Vaccines and natural immunity are not the same, but they are also not consistent. COVID is a moving target.

Luckily, the most recent ammo in the fight against COVID – the Omicron-specific booster – was just approved for use in North America and Europe. By the time you’re reading this text it should be shipping out to pharmacies. It should be available before the end of September!

Note:
I misspoke at about 2:55: I should have said something like “We know from data that the vaccines worked better than natural immunity against Delta and Omicron B, but we also know that natural immunity worked better than vaccinations against Omicron A.” (I accidentally mentioned Omicron B twice. I don’t backpack with fact-checkers. My bad.)

We have never and will never charge for our newsletters or videos, but we do have an ask. If you enjoy our products, we ask you consider supporting MedShare by clicking one of the links below. MedShare is an established non-profit organization that helps respond to medical need globally, including to the ongoing crisis in Ukraine.

CLICK HERE TO SUPPORT MEDSHARE’S UKRAINE FUND

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Beijing Doubles Down on Zero COVID…and Lockdowns

Beijing announced yesterday that it was extending its Zero COVID policy until 2027. This is a direct result of the Chinese government’s failure to develop an effective domestic vaccine, and its steadfast refusal to rely on the safe, effective mRNA vaccines already in use in much of the world. Given the lack of functional vaccine policy, the age of the Chinese population and the timeline for Beijing to develop anything approaching a useful mRNA vaccine domestically, this timeline makes sense. But it lays bare the absolute desperation of the Chinese Communist Party. 

As absolutely detrimental these policies will be for the average Chinese citizen–and if past is prologue, there will be terrible costs to pay economically, socially, and individually–they also underscore the precarious place China plays in the global economy. Which is bad. China rose to prominence in the post-Cold War era as the country and the government most willing to leverage its low labor costs and at times near-nonexistent regulatory environment to convince the worlds’ manufacturers to relocate much of their supply chains onto Chinese soil. What does the future hold? For manufacturers, at least, the constant specter of shut downs as Beijing bungles outbreak after outbreak. COVID isn’t going away, and barring a massive shift in the CCP’s policy’s toward foreign vaccines, the Chinese factory worker, and transportation worker, and dock worker, etc remain at the mercy of a virus that shows no signs of stopping, and a government that shows no sign of stepping up.

Here at Zeihan On Geopolitics we select a single charity to sponsor. We have two criteria:
 
First, we look across the world and use our skill sets to identify where the needs are most acute. Second, we look for an institution with preexisting networks for both materials gathering and aid distribution. That way we know every cent of our donation is not simply going directly to where help is needed most, but our donations serve as a force multiplier for a system already in existence. Then we give what we can.
 
Today, our chosen charity is a group called Medshare, which provides emergency medical services to communities in need, with a very heavy emphasis on locations facing acute crises. Medshare operates right in the thick of it. Until future notice, every cent we earn from every book we sell in every format through every retailer is going to Medshare’s Ukraine fund.
 
And then there’s you.
 
Our newsletters and videologues are not only free, they will always be free. We also will never share your contact information with anyone. All we ask is that if you find one of our releases in any way useful, that you make a donation to Medshare. Over one third of Ukraine’s pre-war population has either been forced from their homes, kidnapped and shipped to Russia, or is trying to survive in occupied lands. This is our way to help who we can. Please, join us.

CLICK HERE TO SUPPORT MEDSHARE’S UKRAINE FUND

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Tianjin, COVID, and Losing Chinese Labor

Several signs point to THE possibility of Chinese officials instituting at least a partial lockdown of the northern port city of Tianjin as early as this weekend. The largest northern Chinese port, Tianjin is also a city of over 12 million people, and its port is vital for delivering goods–bulk ores, coal, liquid fuels–for the region’s heavy industries and textile manufacturing. 

The Omicron variant has already been detected in the city, notably in the Beichen and Dongli districts, where local health officials mandated localized testing and quarantine restrictions on May 16. Widespread testing through these areas–and the removal of tens of thousands of residents into forced quarantine–now looks like it might spread throughout the city. Local officials have also already gone ahead and identified a scapegoat: imported frozen food products.

What’s a little authoritarian lockdown without some trade nationalism?

Tianjin already experienced a partial lockdown in January of this year. Partial in part due to the city’s vital role as the primary port serving Beijing, and also a domestic concern over optics during the Olympics. As we’ve seen from reports and local social media uploads, the lockdowns at the very least cause an undue amount of stress on local Chinese residents. At their worst, they reveal the ugliest face of an authoritarian regime that uses drones to threaten its citizens who dare to scream out in hunger in the middle of the night.

Beyond the human toll of these lockdowns, the Chinese economy and manufacturing base is increasingly finding itself disconnected from global trade. China’s financial hub of Shanghai is currently in its seventh week of lock-down, the southern port city and manufacturing hub of Guangzhou is under lockdown, more and more districts of the capital city of Beijing are entering a so-called “slow motion” lockdown. If we add in Tianjin, as it increasingly looks like we might, that’s several of China’s largest trading and industrial zones, plus the administrative core, under lockdown.

Even in cases where the government seeks to ease lockdowns for critical manufacturing and port operations, worker shortages in China are causing all manner of delays and supply chain dislocations. Over a hundred ships are waiting off of the port of Shanghai as of writing (Hong Kong and Shenzen have nearly 200). Lest you think that labor issues have been sorted out at Western ports, let me remind you that there is still a wait of over three weeks for ships to dock at the port of Vancouver.

It is hard to overexaggerate the role of the Chinese worker in our current globalized economy, and the impact Chinese labor has had on the post-Cold War system. All of that is going away. In return? Rising labor costs, at a minimum. Assuming you can find the workers. Think inflation is bad now? Just wait.

Nervous? Join us June 8th for a webinar on the global geopolitical environment that will be driving US inflation for years to come. Sign up information at the link below.

Here at Zeihan On Geopolitics we select a single charity to sponsor. We have two criteria:
 
First, we look across the world and use our skill sets to identify where the needs are most acute. Second, we look for an institution with preexisting networks for both materials gathering and aid distribution. That way we know every cent of our donation is not simply going directly to where help is needed most, but our donations serve as a force multiplier for a system already in existence. Then we give what we can.
 
Today, our chosen charity is a group called Medshare, which provides emergency medical services to communities in need, with a very heavy emphasis on locations facing acute crises. Medshare operates right in the thick of it. Until future notice, every cent we earn from every book we sell in every format through every retailer is going to Medshare’s Ukraine fund.
 
And then there’s you.
 
Our newsletters and videologues are not only free, they will always be free. We also will never share your contact information with anyone. All we ask is that if you find one of our releases in any way useful, that you make a donation to Medshare. Over one third of Ukraine’s pre-war population has either been forced from their homes, kidnapped and shipped to Russia, or is trying to survive in occupied lands. This is our way to help who we can. Please, join us.

CLICK HERE TO SUPPORT MEDSHARE’S UKRAINE FUND

CLICK HERE TO SUPPORT MEDSHARE’S EFFORTS GLOBALLY

In Shanghai, COVID Rattles the Chinese System

Shanghai – China’s largest city and financial center – has been under a severe lockdown since April 1st as Beijing seeks to contain a runaway outbreak of the Omicron (and Omicron BA.2) variant. Beijing’s dogmatic promotion of the domestically produced Chinese COVID vaccine (and refusal to import foreign-made, more effective mRNA vaccines) has left the Chinese population poorly protected against the coronavirus as we head into the third year of the pandemic. 

Incredibly strict lockdowns are the only tool available to Chinese leadership as they continue to pursue a “COVID Zero” policy, but with the most recent variant infections and deaths continue to rise as an overwhelmed health and security apparatus struggles to keep up. 

The people of Shanghai, and Hong Kong, and likely soon Beijing are facing extraordinary pressures as hunger and surveillance and fear and censorship take their toll. And the cult of personality that Chinese President Xi Jinping has worked to build over the past decade is squarely in the crosshairs. 

The war in Ukraine isn’t doing Xi any favors, either. Beijing is facing a world now where private companies and investors – both critical cogs in China’s economic systems – have been flexing their boycott muscles. Too draconian a response against potential protests risks triggering a massive global economic backlash. And for a country in desperate need of fuel and food imports, Russian supplies face a logistical blockade of limited infrastructure capacity, geographic challenges, and the constant spectre of international sanctions.

Here at Zeihan On Geopolitics we select a single charity to sponsor. We have two criteria:
 
First, we look across the world and use our skill sets to identify where the needs are most acute. Second, we look for an institution with preexisting networks for both materials gathering and aid distribution. That way we know every cent of our donation is not simply going directly to where help is needed most, but our donations serve as a force multiplier for a system already in existence. Then we give what we can.
 
Today, our chosen charity is a group called Medshare, which provides emergency medical services to communities in need, with a very heavy emphasis on locations facing acute crises. Medshare operates right in the thick of it. Until future notice, every cent we earn from every book we sell in every format through every retailer is going to Medshare’s Ukraine fund.
 
And then there’s you.
 
Our newsletters and videologues are not only free, they will always be free. We also will never share your contact information with anyone. All we ask is that if you find one of our releases in any way useful, that you make a donation to Medshare. Over one third of Ukraine’s pre-war population has either been forced from their homes, kidnapped and shipped to Russia, or is trying to survive in occupied lands. This is our way to help who we can. Please, join us.

CLICK HERE TO SUPPORT MEDSHARE’S UKRAINE FUND

CLICK HERE TO SUPPORT MEDSHARE’S EFFORTS GLOBALLY