CHINA HAS A CHOICE TO MAKE. WILL IT BE AUSTRALIA? OR RUSSIA?
The deomographic cliff is fast approaching...
The People's Republic of China (PRC) is heading to the edge of a cliff of its own making. On the eve of 2049, the centenary of the Party taking control of the nation, China's population could be less than half of what it is today. Ian Bremmer, the founder of political risk research and consulting firm Eurasia Group, says, "There is no economic model for a China with a population of just six-hundred million."
So here's the problem, and it's no reason for the West to gloat because the problem will soon become a major issue confronting the world. Back in 1971, China's economy was agrarian. When you own a small farm and you're working the land, it makes sense to create your own free labour force — popping out as many rug rats as your wife's womb will allow.
But then in 1980, when China's population was seen to be getting completely out of control, the Party put the brakes on the birth rate by introducing a raft of heavy-handed policies, the cornerstone of which was limiting families to one child. The command was even written into China's constitution. The effect of this was to heavily select in favor of males. Why? Many reasons, but chief among them are females require mom and dad to cough up an expensive dowry at some stage, and girls are not such an asset working the land where physical strength is an advantage. The unintended consequence of the One-Child Policy: hundreds of thousands of female foetuses were aborted.
This new urbanised workforce was more interested in funding the purchase of other people's stuff, like new BMWs, and rug rats, well, they're really just a cost…"
However, around the same time, China's economy began to change, slowly at first and then in a rush. Its billion-and-then-some people stopped working the land and started making stuff. Lots of stuff. The manufacturing of all this stuff required a very large labour force and, fortunately, one was at hand - all those rug rats pumped out to help mom and dad grow stuff. A mass exodus left the land, moved to the cities and rural China became an urbanised China almost overnight. More accurately, within a generation (20 years).
This young, strong labour force was highly productive and energetic. China readily assumed the responsibility of making the world's stuff and reaped the financial rewards accordingly.
However, far fewer rug rats were being born into this new city-dwelling nation. For one thing, there's little room for even one child in a typical tiny PRC apartment. And for another, this new urbanised workforce was more interested in funding the purchase of other people's stuff, like new BMWs. And rug rats, well, they're really just a cost, right?
The sharp line in the distance was not actually the horizon but the edge of that cliff.
When Xi Jinping assumed the mantle of top banana, one of the first things he did was ditch the one-child policy, snipping that bit off the bottom of the constitution like an unwanted foreskin. Mostly likely some clever demographer pointed out to him that the sharp line in the distance was not actually the horizon but the edge of the cliff. But the end of the one-child policy didn’t make much of a difference to the new city-dwelling, educated, upwardly mobile middle-class China.
And time marched on. China's once young and vibrant workforce continued to age. More people in China were getting old and there were fewer young'uns coming up to support them. Something called the 4-2-1 rule was — and is — the new reality: one working couple supports four parents and one child.
In 2021, the International Monetary fund observed that China's economy is "unbalanced and momentum is slowing". In 2021, China's growth rate was 8.1%. In 2022, it has fallen to 4.3% due to falling productivity, decoupling with the U.S., Xi’s crippling zero COVID-19 target policy, and a shrinking workforce.
That places the PRC in a sticky position. What can it do? Certainly nothing in the short term. Some China experts point out that the People’s Republic could simply amp up its education and go the high-tech value-added route. Here again, though, it's not so easy. The PRC still has a very large number of poor, aging people who live on the land and the education available outside the cities for the children that are being born in these areas is not up to scratch. Furthermore, there are laws prohibiting poorer people from sending their children and grandchildren to better city-based schools.
China will need far greater resources to support its very large and aging population
The point is that very soon, with this demographic cliff in its reasonably near future, China will need far greater resources to support its gigantic aging population. Where could it find these resources? One potential option — conquest.
Taiwan is an important point of pride for Xi, and it will inevitably be absorbed when China feels it has parity with the U.S. militarily – experts believe that to be 2027. The island state has a large and successful semiconductor industry, and that would be handy to have, but bringing the wayward democracy into the larger fold won't add the coin required to offset "the cliff".
Australia is a logical choice for conquest. We have metals aplenty, enormous gas reserves, vast swaths of land, significant fish stocks, a commanding global footprint, relatively insignificant defences… We'd be quite a prize, even if Australia doesn't have much of a population that could be enslaved (in the nicest possible way) to make stuff. It's when China's manoeuvrings in the South China Sea and the Western Pacific (Samoa) are taken into account (ASK ME ANYTHING #2) that it really does seem that Australia is on the menu. The one rather large red flag for China to consider where Australia is concerned is the regard the global community of nations has for the land Downunder. Would an invasion of the southern continent trigger a similar response to the one supporting Ukraine? Possibly. Probably. In fact, yes, more than likely.
But there is another alternative. And here's where I get cute and include a few poetically appropriate quotes. The first is from Niccolò Machiavelli, the 16th Century Italian diplomat who perfected the art of smiling while stabbing someone in the back. Machiavelli advised,
"No proceeding is better than that which you have concealed from the enemy until the time you have executed it."
What's the concealed alternative to Australia? It's Russia. Russia? Yes. Like Australia, Russia also has resources aplenty as well as a vast footprint that China can potentially conquer without crossing a sea to invade it. The handy border China shares with Russia is over 4000 kilometers in length, twice the length of the border Russia shares with Ukraine.
What Russia has that Australia doesn't is a large and cheap labour force. But the primary factor pointing in Russia's favour is that Putin is steadily bankrupting his military establishment, bashing its head against a West-supplied Ukraine, an action that has made Russia a pariah cut off from the global community of nations. How would the world react if China quietly, stealthily gobbled up Russia? Perhaps it wouldn’t even need to invade militarily if Russia’s economy completely crashed. Hmm…
Putin's desire to have a superpower in his corner prior to the invasion of Ukraine couldn't have come at a better time for Premier Xi. That cliff is getting closer and here is Putin conveniently presenting Xi with his neck.
And Xi is playing his part perfectly. He’s refusing to condemn Russia for its invasion. He’s buying cheap Russian oil and grain and supporting Russian walkouts in various international forums. What Xi is in effect doing is emboldening Russia to keep at it, keep going, don't stop now, you'll get there, buddy… Xi wants Putin to struggle on and no matter the cost because it suits his purposes. As General Sun Tzu would say:
"Let your plans be dark and as impenetrable as night, and when you move, fall like a thunderbolt.”
Meanwhile, Xi's tacit support for Russia's invasion is frustrating the West. But to Xi this is a bonus because, as the premier's favourite philosopher Han Fei advises,
"A wise ruler, when he makes his laws, is bound to find himself in conflict with the world."
In other words, you know you're getting it right when you upset everyone. World leaders and global forums venting any kind of anger toward China merely tells XI he's doing a good job.
But it's when Xi and Putin meet in Beijing and both men break out the smiles — that gets me thinking. What are those smiles all about? What do they really mean? My sense is that Putin's smile is an expression of simple relief that he has at least one large and powerful friend rooting for him. And why is Xi smiling? Because the stumpy bald white spud goblin beside him clearly has no fucking idea what's potentially coming his way.
When I see that smile on Xi’s face as he clasps Putin’s hand, the quote that springs to my mind are the opening lines in Mary Howlett’s poem,
“Walk into my parlour," said the Spider to the Fly. 'Tis the prettiest parlour that you ever did spy."
With neighbors like Putin, no need to worry about any ol’ cliffs.
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Cheers
David
You're dead right David. Putin has buggered Russia and it's now packaged up like a Xmas turkey for Xi. With China as his only supporter and customer for Russia's huge resources, Xi virtually owns him without firing a shot. Let's hope the present that's been handed to him will make Australia a less likely target.