globalization

Debunking Peter Zeihan’s Shocking and Popular China Predictions

Here are some shocking predictions about China from geopolitical strategist Peter Zeihan:

  • China’s population can fall by 50% by year 2050. (link)
  • China, in ten years, will not exist as a functional nation! (link)
  • Entirely possible that 2022 is the last year of PRC! (link)

Zeihan is the new favorite gloom-and-doom pundit when it comes to prognosis about America’s geopolitical enemies like China and Russia. His speeches on YouTube have received millions of views; and even the U.S. military invites him to give speeches. He also has a fascinating speech style that involves frequent emphasis of words and dramatic pauses.

He focuses a lot on demographics and is obsessed with food and energy independence. Based on these three factors, he concludes that America is in a fantastic position and China is doomed. He is full of sensational predictions and extreme claims — with adjectives like “greatest,” “biggest,” and “worst” sprinkled throughout the speeches. His statistics are also cherry picked, misleading or sometimes completely wrong, as we will see.

However, Americans love just this sort of narrative. Anti-China analysts and journalists have been very popular in the U.S. for the last two decades. And however many times these people are proven to be wrong, the demand for this perspective is always high. For example, Zeihan’s predicted in April that Russia’s production of oil will fall by 50% by July, which has been spectacularly wrong.

Let’s quickly analyze each of Peter Zeihan’s China predictions and see why they are preposterous and implausible.

China’s Population Will be Halved by 2050

Peter says that China’s population will fall from 1.4 billion now to 700 million by 2050. This is impossible. Here’s why. The median age in China is now 38 (which happens to be the same in the U.S. as well). That means, half of all the people in China now are over the age of 38.

Thus, for China’s population to fall by half by 2050 — in the next 28 years — two things have to happen:

  • All the people who are now older than the median age should be dead by 2050, and
  • Chinese people will have zero children for the next 28 years.

But neither of this can happen! Here’s why:

Life expectancy in China is already 78. Even if we assume that the life expectancy stays the same, it means that only people now aged 50 and above will be dead by 2050. As shown below, Chinese people below the age of 50 now will be alive in 28 years (i.e. by 2050).

Looking at the population pyramid, we see that people above 50 make up 33% of the population now — about 450 million.

Thus, the total number of deaths (between now and 2050) will be 450 million and NOT 700 million as Peter Zeihan claims. This means, that the population will be about 1 billion in 2050.

Furthermore, there will be new births that add to the population.

As for babies, yes, it’s true that the number of newborns has been dropping precipitously in China. In 2021, there were only 10.6 million babies born in China. Let’s say that, on the average, China has only 7 million babies every year over the next 28 years. That would be about another 200 million people.

So, the total population will be about 1.2 billion in 2050.

So, the transition from 2022 to 2050 would look like the chart below:

To summarize, Peter Zeihan’s prediction of China’s population is off by about 500 million! Thus, in the worst case scenario, China’s population in 2050 will be 1.2 billion, rather than 700 million.

To be scientific and objective, the UN forecast for China’s 2050 population is between 1.2 to1.4 billion.

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There’s a Chinese American professor, Fuxian Yi, whose work is cited a lot by mainstream media. He’s the one who says that China’s population is actually 100 million smaller, the fertility rates are much lower etc. However, even his projection is that China’s population will be about 1.1 billion by 2050:

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China certainly has a demographic crisis, but all Western and developed nations like Japan, South Korea, Germany and pretty much all the European countries face the same crisis. Look at the median ages: China is younger than all the top developed countries:

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And then look at the birth rates (per 1000 people) in China versus other countries like Italy, Spain, Japan and South Korea. China is actually better off!

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What’s the solution to the declining workforce and ageing population?

  1. Automation. AI and robots will increasingly do more jobs
  2. Off-shoring labor-intensive jobs to poorer and younger countries. India, for example, will be a good destination.
  3. Immigration. At some point, China may have to bring in workers from South East Asia.
  4. Increasing retirement age
  5. Policies to encourage more kids — tax cuts, subsidized housing, free child care etc.

Okay, let’s move on to more Zeihan nonsense.

Without Food Imports, Famine Will Kill 500 Million Chinese in a Year

This is a popular narrative in the U.S. social media, even though it’s completely absurd. Especially the right-wing in the U.S. repeats this fantasy all the time.

However, the simple fact is that China is fully self-sufficient in the basic food necessities.

Consider the following stats:

  • China is the world’s largest producer of rice,
  • China is the world’s largest producer of wheat and
  • China is the world’s largest producer of potatoes.
  • China is the world’s largest producer pf vegetables and fruits

That translates to an annual production of 211 billion kilograms of rice, 140 billion kg of wheat, and 94 billion kg of potatoes. Those three food items alone provide 2500 calories per day for every man, woman and child in China.

China also leads the world in production of vegetables as well as fruits. China produces almost 600 billion kg of veggies every year — four times as much as the next country (India) and 18x as much as the US. Thus, add in vegetables, fruits and fish caught from the ocean, and it’s obvious that nobody in China is going to starve.

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Below are the charts of China’s production of vegetables and fruits. China surpasses other nations by a huge margin — including India, whose population will be larger than China’s this year.

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So, what’s Peter Zeihan’s fake news all about?

Soybeans. For cows, pigs and chickens!

The only food China is dependent a lot on other countries is soybean, which is a big component of animal feed used for chickens and pigs. Chinese farmers and families raise about 700 million pigs every year. However, a bigger fraction of the animal feed is corn, for which China is the world’s #2 producer.

In the worst case scenario, Chinese people will have to eat less meat. But if China can find substitute for soy — like, sunflower seed/oil from Russia — then even the meat consumption won’t be affected.

This is why China is considered to be “food secure.”

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In summary, the narratives about “famine in China” and “500 million dead Chinese people” are just a reflection of a sick fantasy in the perverted minds of the anti-China crowd.

Many Countries Want to and Can Destroy China

In Peter Zeihan’s fantasy novel, there are numerous countries that really, really hate China. Given a chance, they will destroy China’s economy and kill hundreds of millions of people.

Let’s explore this utterly mad theory.

First, yes, China is very unpopular in many countries. In Japan, Vietnam, India and most Western countries, the unfavorable view of China is quite high. However, that does not mean that the people or the leaders of those countries want to commit genocide and kill hundreds of millions of Chinese. This hatred is just a projection of some deeply disturbed people.

More importantly, China is the #1 trading partner for 130+ countries. (Source: Economist)

Their economies depend on China. For example, Middle Eastern and African countries earn a lot of money by exporting natural resources to China. India’s strategic pharmaceutical industry gets about 80% of the raw materials (APIs) from China. About half of the antibiotics in the world come from China. The global semiconductor industry cannot function without China’s testing and assembly. The world will have no smartphones and computers without China. There won’t be any processed rare earth minerals or solar panels or electric car batteries without China, which controls more than 75% of each of those sectors. And on and on.

Finally, China has offensive options as well. For example, the CCP can take over all the Western companies based in China. And that’s pretty much every S&P 500 company — including Tesla, Starbucks, GM, Pizza Hut and so on. Many big names like Apple and Walmart will also be bankrupt in a month without the factories and supply chains in China.

Basically, without China, the world’s economy will collapse. You cannot kill China, the global manufacturing powerhouse, without killing yourself.

Think about how the US is not able to isolate Russia after the Ukraine invasion. Isolating China will be infinitely more difficult and mission impossible.

If the US leaves Asia, Other Countries Will Attack China

According to Peter Zeihan’s fairy tale, the only thing that’s stopping other countries from attacking China is the glorious American Navy, which is keeping the sea safe for transport. Peter’s laughable theory is that if the US leaves Asia, other countries will attack the oil tankers that transport oil to China.

Really? Let’s say that a Greek ship is transporting Saudi Arabia’s oil to China. Who will stop that ship? Nobody. It will be an act of war against multiple countries. According to Zeihan-the-nut, India might attack or capture the oil ships. Hello! India depends on Saudi Arabia, UAE, Iraq etc., who are not only India’s #1 oil supplier but also consider China as their #1 customer. So, no, India won’t be doing such suicidal stuff.

And let’s not forget that China has 300+ nuclear bombs and missiles that can reach any place on earth.

Also, the US will never leave Asia. Even proposing that as a theory is very stupid. America’s biggest fear is China taking over Taiwan, dominating East Asia, and becoming a regional hegemon. That’s why US politicians and diplomats have been recently visiting Taiwan, Philippines, Vietnam and others to shore up support.

The US will evacuate its military bases in Japan, South Korea, Guam etc. only after the American Empire collapses. Until then, the U.S. will stay in Asia to contain China.

Other Crazy Claims of Peter Zeihan

Peter just casually makes atrocious claims. Like, “China’s Yuan has no value” or “Chinese economy is significantly smaller than the US economy” or “China has the fastest growing wage in history, and the US will bring manufacturing from China to Mexico.”

It’s just one ridiculous comment after another.

“Yuan has no value” — Peter Crazy Zeihan

What an absolute idiot! In 2022, Xi Jinping went to Saudi Arabia and 20 Arab leaders flew in to meet with him. During the Arab Summit, Xi openly proposed “Petroyuan” — oil for Yuan, and gave the timeline of 2025. There is a tsunami on the horizon and fake prophet Peter Zeihan is telling people that there is no such thing as a wave.

Let’s start with the basics. Obviously, Yuan or Renminbi has value within China. 1.4 billion people use it every day!

Most global Fortune 500 firms have a big presence in China. For example, American retail firms like Starbucks and KFC have thousands of stores in China; and companies like Apple, Tesla and Nike get 20% of their revenues from sales within China. Well, guess what, all these foreign companies in China earn their money in Yuan, which they get to exchange it for US dollar. Thus, it’s beyond stupid to say that Yuan has no value.

In the beginning of 2022, foreign investors held about ¥4 trillion (equivalent to $640 billion) of Chinese bonds (link) and an almost equal amount of Chinese stocks (link).

The Yuan is also a part of IMF’s SDR basket of currencies. China’s trade was worth whopping $6.3 trillion in 2022 and growing. At some point, it’s only natural that Yuan will become a dominant currency in global trade. (Listen to Ray Dalio on this historical fact).

For example:

In 2021, the total cross-border settlements in Yuan was about ¥35 TRILLION — worth more than $5 trillion!

If it were not for US’ coercion and threats, many more countries will accept Yuan. Why is the US so threatened? The exorbitant privilege of US dollar is what underpins America’s prosperity.

Does Peter Zeihan know that 70 countries are holding Yuan in their foreign exchange reserves? A couple of months ago, the Bank of Israel joined that crowd. And Yuan actually makes up staggering 45% of Russia’s FOREX — thanks to the US/EU sanctions. In Moscow’s stock exchange, Yuan is now the most-traded currency!

It is true that China is careful about fully opening up the Yuan, since China’s economy is dependent on trade surpluses. Furthermore, Wall Street has numerous tools to attack a free-floating Yuan. However, with the digital currency coming out in the near future, the internationalization of Yuan will move forward. Moreover, thanks to US/EU sanctions, many countries will gladly welcome an alternative currency to escape American financial aggression.

Let’s remember that reserve currencies come and go. Here’s a look at the last 500 years: Portugal, Spain, Netherlands, France, and Britain all had their glorious days. Nothing lasts forever.

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“China is a small economy”

As for Peter’s claim that China is “significantly smaller than the US,” here is the 2021 GDP chart. China is actually larger than the entire EU! In 2022, China’s GDP was $18 trillion.

As I have shown before, it’s very likely that China will surpass the US as the largest economy within 5 years.

As for China’s wages, yes, China will lose some labor-intensive jobs to poorer countries. However, I have described in other blog posts why such losses have not been significant. Other countries cannot match China in terms of supply chains, efficiency, flexibility, infrastructure etc. Thus, even though Chinese manufacturing wages are 10x higher than many other developing nations, China still dominates many of the low-end manufacturing like textiles, apparels, toys etc. As a clothing exporter, China is #1 with a staggering global market share of 31%. Vietnam, Bangladesh and India combined make up only 17%.

Zeihan’s fantasy with Mexico is delusional. Manufacturing is already 18% of Mexico’s GDP. And that number may go to 25% max. That extra 7 percentage points translate to less than $100 billion, an insignificant number compared to China’s $5 trillion manufacturing juggernaut.

Conclusion

On one hand, Western establishment cries about China taking over the world. Recently, FBI and MI5 chiefs declared China as the #1 economic threat. And the US constantly makes military and economic alliances like the QUAD, AUKUS, IPEF and PGII to counter China in numerous ways. Even NATO has now deemed China to be a long-term threat. The USA has slapped crippling sanctions on 100+ Chinese tech companies and is also desperately trying to sabotage China’s semiconductor industry.

Wait, if China is going to collapse soon, as Peter Zeihan claims, why is the West spending so much time and energy to contain China?

The simple fact is that the West needs pied pipers and buffoons like Peter Zeihan to calm down the American public and also sow doubts in the minds of leaders of other countries. Geopolitics and economics also involve a lot of psychology. Corporations and countries want to bet on the winning horse, and the US does not want the world to bet on or follow China.

China has a lot of problems, and its growth will continue to slow down dramatically. However, China is going to be an economic, diplomatic and military superpower in the emerging multipolar world. If the US continues to listen to charlatans like Peter Zeihan, it is in for a rude awakening soon.

-Chris Kanthan