Renowned geopolitical analyst Peter Zeihan recently made a startling prediction during an interview with commentator Joe Rogan.
Zeihan believes that China’s collapse is imminent, with only 10 years remaining before potential disaster. The crux of his prediction lies in his assertion that China has misrepresented its population numbers, leading him to estimate that the country’s actual population is lower by 100 million than what the government has officially reported.
“This is their last decade,” said Zeihan about China. When Rogan clarified by asking, So, you’re saying that China has 10 years to go?” His response was, “At most.”
Some argue that China’s massive military, control over its people and economic power are safeguards against its demise, but others point to concerning signs that hint at potential challenges ahead.
China’s economy is showing signs of strain from various angles. Civil unrest erupted as a result of its strict zero-COVID policy, leading to lock-downs, reduced industrial output and restrained consumer spending.
Last year, economic growth experienced a significant decline, reaching one of its lowest levels in the past 50 years. The fourth quarter, in particular, was severely impacted by strict economic policies and political decisions that were deemed unwise.
With China’s population aging rapidly, there are fewer working-age people to support retirees. The one-child policy, which lasted for more than three decades before ending in 2016, worsened the situation and threatens long-term economic prospects. While China has attempted to address this by allowing couples to have up to three children, the extent of its impact on the workforce remains uncertain.
The Chinese real estate market has been grappling with a prolonged slump. In 2022, the country saw another major drop in home prices, marking the steepest annual drop since 2015. The downturn has reverberated through various sectors of the economy, including construction, steel and cement, causing a decline in demand and leading to job losses and an overall slowdown in economic growth.
The ongoing real estate slump has become a major cause for concern for the Chinese government. To counter the decline and stabilize the market, the government has implemented a range of measures, including tax breaks and subsidies for homebuyers. Despite these efforts, the decline in home prices has persisted, posing a significant challenge for policymakers seeking effective solutions.
The country’s exports also saw a 9.9% drop from the previous year. Trade plays a significant role in China’s economy, with exports accounting for around 20% of its gross domestic product in 2021. But this reliance on international trade makes China susceptible to global economic fluctuations and trade policy shifts, as demonstrated during the COVID-19 pandemic when demand for Chinese products declined.
China is now attempting to pivot toward domestic consumption to drive growth, with electric car manufacturers showing promise in leading the way. Nevertheless, a comprehensive shift will necessitate significant changes in China’s economic structure and policies.
While the International Monetary Fund predicts China’s economy will grow 5.2% (an increase from its previous 4.4% forecast), the economic headwinds and demographic challenges facing the nation could have significant implications on a global scale. Any slowdown in the Chinese economy may trigger price pressures in the U.S. and impact the demand for American products.
Produced in association with Benzinga