The “Gift” of Coronavirus

In the past couple of weeks coronavirus cases outside of China surged. Particularly worrisome clusters emerged in South Korea and Iran, countries which serve as transport hubs for their respective worlds. US President Donald Trump is doing his normal rambling press conference thing, contradicting most of what little information that is out there. Data coming out of China is more positive, but the idea that China and only China has cracked the code on how to stop a highly virulent virus from spreading in dense population centers is, in a word, dubious. Is anyone not feeling at least a bit…twitchy?

Let’s shift the conversation: Coronavirus may be the most positive thing that’s happened to the global economy in recent years.

China is the world’s workshop. There are precious few complex manufacturing supply chains that don’t link to the mainland in at least some way, with computing, electronics and automotive by far the most exposed. China represents a bit more than a fourth of global manufacturing output all on its own and sports seven of the ten busiest container ports in the world.

The two zones in China most impacted by coronavirus are the Pearl Delta and Yangtze Valley. Most of the 150 million people in China under some degree of involuntary quarantine reside in these zones. The Pearl and the Yangtze are the two most technologically advanced portions of the country, sporting the most sophisticated industrial bases. These regions are by far the most internationally connected of China’s population zones.

The viral epicenter city of Wuhan is one of the largest automotive manufacturing centers in China. Nissan and Honda alone manufacture nearly 2.25 million automobiles there annually. Dongguan, a city in the Pearl River Delta, is known as “the world’s factory” and on its own produces an estimated one-fifth of the world’s smartphones and one-tenth of its shoes.

We’ve all read about how this or that product or company or industry faces pressure from the Chinese shut-ins. So far, shipping companies have cancelled over 80 sailings of container ships, meaning that tens of billions of dollars of goods, many of them inputs into other goods, either weren’t produced or couldn’t get where they needed to go. The sudden lurch in China’s $70 billion annual auto-parts exports industry is already stalling automobile manufacturing in South Korea and Eastern Europe.

But here’s the thing: China’s position in the global system is artificial, and it was going to end anyway.

A look back:

To distill America’s entire Cold War strategy: the Americans created a global Order to provide an economic incentive for membership in their military alliance network. The Americans broke the empires and paid everyone to be on their side against the Soviets. Of the many unintentional side effects was the fostering of an environment where no one shot at anyone else’s shipping, no matter how valuable that shipping might be.

In absolute terms, China is by far the biggest beneficiary of this American-led Order. Japan and the Europeans had carved Chinese territory into imperial spheres of influence. The Americans ended that. China’s manufacturing prowess required the economies of scale of all China being under a single government system. The Americans enabled that. China’s import-export model requires freedom of the seas for commercial shipping to sale the ocean blue without military escort. The American Navy guaranteed that. Without the American-led Order, the Chinese would have never been able to unify or industrialize or modernize or urbanize.

Today, as the Americans step back, there is less than zero hope for the Chinese to step forward. China’s navy is short-range, designed to recapture Taiwan.  Convoying clusters of slow-moving supertankers to and from the Persian Gulf is simply beyond China’s capability, much less enforcing the sort of all-ocean maritime safety that the Americans have done as a matter of course these past seven decades.

If anything, it is worse than it sounds.

Energy: China has had no equivalent of the American shale revolution. As the Americans have achieved net energy independence, the Chinese have quadrupled down on becoming the world’s largest oil importer, with the bulk of their oil needs sourced from none other than the Middle East. China lacks the ability to convoy tankers to and from the region (past oil-importing regional rivals Japan, Taiwan, Vietnam and India no less), much less intervene in a way that might preserve oil flows in the way the United States has done almost pathologically these past seven decades.

Agriculture: Some 80% of global foodstuffs can only be produced with imported inputs, whether that input be fuel or fertilizer or fungicide. China has plowed under its best farmland to build all those factories, making the country more input-dependent than most: China today uses some five times the inputs per unit of food of American farmers and still hasn’t achieved food self-sufficiency. In a world without trade China can neither import sufficient foodstuffs from a continent away nor grow its own. Failures in food distribution have crashed far more governments than war or disease. Just ask Mao how he rose to power.

Manufacturing: Modern manufacturing is a logistical marvel that taps hundreds of facilities in dozens of countries, but that system is based on frictionless international trade. Break just a few links and the entire network collapses. A modern car has about 2000 parts. If you are missing ten, you’ve got a large paperweight. Even if the Chinese could somehow magically maintain their globe-spanning supply chains without a globe-spanning navy, there remains the question of who would buy everything?

Demographics: The One Child Policy has gutted the country’s next generation of consumers far more effectively than anything the Cultural Revolution or Great Leap Forward ever did. The mean Chinese aged past the mean American about two years ago, so a consumption-led system at home is simply off the table. Slow-moving aging throughout the bulk of the world is doing something similar in Europe and Canada and Brazil and the former Soviet Union and Japan and Korea. Even if somehow the Chinese could make their manufacturing system work without the American security blanket, the export-based model upon which contemporary China is based would have ended this decade anyway for want of consumers.

In a world where the Americans do the security heavy lifting and guarantee the world access to their consumer market – one of only a few that will not contract in the 2020s and 2030s – China’s global integration efforts aren’t simply smart, they are doomed to succeed. In a world in which the Americans’ step back and the rules by which the world works change, China is doomed to do the other thing.
Which means coronavirus is giving us a rare gift. A glimpse into a future without globalized manufacturing in general, but in specific a glimpse into a world without China.
Any company or industry that can weather the suspension of industrial activity in the Pearl and Yangtze should be able to manage the coming global collapse with relative ease. Any that can’t, well, they now know precisely where their exposures are. The question now is whether impacted firms treat this as a one-off or the serendipitous peek that it is.

My new book Disunited Nations: The Scramble for Power in an Ungoverned World published March 3. It contains a big fat trio of chapters on what makes for successful empires and countries, much of which focuses on China. Spoiler alert: It doesn’t look good


Get Ready for Some Maps

Hey everybody,

I really appreciate the excitement and support for Disunited Nations. This has been a crazy project since Day One and there aren’t words to communicate how thrilled I am that it is finally not simply real, but available! Thanks to everyone for helping make it a reality!

I hope those of you who picked up your copy of Disunited Nations are thoroughly enjoying the experience. But there is one thing that I wish was different. Unfortunately, there isn’t a publisher out there that will let me give you the full color maps in all their glory. The Kindle and the audiobook versions don’t even get the graphics! And so, with each book, I make sure my readers have access to them on my website. The Map Archive is officially open! 

If you haven’t bought it, go check out my introduction (below). If you have friends that haven’t bought it, please do consider forwarding this email. And I do have one more hard ask: please submit a review wherever you bought a book… when you finish reading.

I’ll leave you, for now, with a graphic from the book. It’s the first graphic in Disunited Nations and one of my favorite graphics ever. It highlights just how much the world has benefited from the American-led Order. So much of it is not simply at risk, but about to violently unwind.

Thanks again, 

Peter Zeihan         



It is with great, nay, ecstatic enthusiasm that I present to you Disunited Nations! That’s right! It is finally here. Two years in production, the book is now in stock at Barnes & Noble, Amazon, and every independent bookstore of size. It will be put out front on March 3, and advance orders are shipping…now!
Zeihan’s more controversial projections will keep readers squirming, usually with pleasure….Another masterful, often counterintuitive, relentlessly entertaining geopolitical thrill ride.
Kirkus Starred Review

Zeihan integrates a wealth of information and data into lucid analyses written in accessible, boisterous prose… The result is a stimulating look into the geopolitical crystal ball.
Publishers Weekly Review


Introduction to Disunited Nations

We are only five days out from the release of my third book, Disunited Nations: The Scramble for Power in an Ungoverned World. As a final tease, below are the chapter headings. As you can see this book is a full-on once around the world. We’ll chop through all those countries that we’ve all thought of as the countries of the future and show how they will be anything but. But more importantly we’ll explore a few countries we rarely think about that will rise to dominate the human condition.

As an added kicker, at the end of this letter is a link to the full intro…

Moments of Transition

The Road So Far 1

How to Rule the World, Part I: The American Model

How to Rule the World, Part II: The British Model

How to Be a Successful Country

Japan: Late Bloomer

Russia: The Failed Superpower

Germany: Superpower, Backfired

France: Desperately Seeking Dominance

Iran: The Ancient Superpower

Saudi Arabia: The Anti-Power and the Destruction of the Middle East

Turkey: The Awakening Superpower

Brazil: Sunset Approaches

Argentina: The Politics of Self-Destruction

The Misshape of Things to Come: The Future of American Foreign Policy
Thread 1: Unwinding the Global War on Terror
Thread 2: The Order Hangover
Thread 3: Strategic Retrenchment
Thread 4: Profits Without Borders
Thread 5: Desperately Seeking Instability

The United States: The Distant Superpower

Present at the Destruction: The Dawning of the Fourth Age

Zeihan’s more controversial projections will keep readers squirming, usually with pleasure….Another masterful, often counterintuitive, relentlessly entertaining geopolitical thrill ride.
Kirkus Starred Review

Zeihan integrates a wealth of information and data into lucid analyses written in accessible, boisterous prose… The result is a stimulating look into the geopolitical crystal ball.
Publishers Weekly Review


Almost There

Allllmoooost Theeereeee

We are now only six – SIX! – days away from final publish of Disunited Nations: The Scramble for Power in an Ungoverned World. The book is now in stock everywhere, with advance orders about to be shipped out.

This has been a fun, if exhausting, project to work on this past year and I am absolutely thrilled that the book in about to be in everyone’s hands.

Reviews are starting to come in as well. We’ve already received some great coverage from Kirkus and Publisher’s Weekly. As of yesterday, the hardcover, Kindle and Amazon versions are taking up three of the top five spots on Amazon’s new releases list for Globalization & Politics, while the book has hit B&N’s top 100 list. 🙂

If you’d like to get a copy the day of publish without needing to hunt down a bookstore, you can get on board with the final batch of pre-orders here.

And for those of you who cannot wait, I can offer you my Cutting Room Files – parts of the book that were snipped for length, and then adapted for publish in the context of the day.

Happy reading!

In the first of the Cutting Room Files, the Koreans have a hideously distasteful choice to make. They must prepare for a world without the Americans and that means they must find a new security guarantor. The menu of options are not encouraging.

There is good news and bad news for Mexico in the coming Disorder. On one hand, the country has lashed itself to the American market through NAFTA2. On the other hand, cartel violence is only getting worse. Part 2 of the Cutting Room Files.

Unless Canada can get its shit together, the system will split along provincial, economic, demographic and ideological lines. The Canadian election with its minority government wasn’t exactly encouraging. Part 3 of the Cutting Room Files.

In Part 4 of the Cutting Room Files, Japan is a country exceedingly well set up to not simply survive in a world without America, but to dominate its neighborhood. Even if it’s off to a bit of a rocky start…

Brexit provides the Americans with the biggest opportunity to lock the Brits into strategic enslavement since Lend-Lease. This time, it will come in the form of a trade deal. Any realistic alternative seems unlikely. Part 5 of the Cutting Room Files.

The Phase1 trade deal with China is moving forward but its not the major deal Trump was hoping for. That would take a fundamental reshaping of the Chinese economy. Sounds easy… right? Part 6 of the Cutting Room Files.

The Eurozone had enough nails in its coffin before the Trump presidency. Now its looming debt, demographic and security crises are about to feel the pressure of Lighthizer-led America First trade negotiations. Prognosis for Europe? Less than good. Part 7 of the Cutting Room Files.

One of the perks of my work is that I can avoid the squabbles of domestic politics. But the dysfunction is just so loud and the Democrats and Republicans are just so broken… Part 8 of the Cutting Room Files.