President Xi is pinged
Pinged = f**ked
In recent years, mainstream media outlets have leaned into the ‘intensifying competition between US and China’ narrative. However, while the competition may have been ‘intense’ during the Cold War II (as I wrote about here), this is no longer a contentious contest.
The story of China and President Xi is already scripted, just as the geography around us is already sculpted. Since the beginning of time, humans have been an extension of mother nature and the geography we inhabit. If she brings drought, we get thirsty. If she brings famine, we get hungry. If she brings disease, we get sick. And it is because of her that the history of China is one of rise and fall, boom and bust, tremendous growth and horrifying collapse. As China’s geography confines it from global ambitions and dictates that it will only exist within its borders, with a population far smaller than what exists today.
To frame my view, I’ll discuss three elements. Each in their own right can cause massive issues for a society, but in combination China could be set for an incoming disaster.
Demographics and the economy
An unforeseen consequence of the one child policy in China was the skewed male-to-female ratio, with far fewer females in the country. This had the knock-on effect of a sharp rise in competition among lads to stand out to attract the rare mate floating about. To stand out many lads dived into excessive debt, purchasing multiple properties which in turn lead to the construction of entire ghost cities. These issues are already well documented in mainstream media and even in my own articles from last year here. So I’ll discuss some less widely known, more unforeseen issues.
Within Chinese society, it was not just the lads that adjusted their dating approach. Because of their scarcity, Chinese ladies could afford to put their feet up and wait for flocks of lads to come knocking, instilling a sense of laziness and entitlement among them. In comparison, many lads over-stretched and over-leveraged themselves into finding a match. So after tying the knot, this imbalance in the relationship fostered many unhappy marriages, accelerating their falling birth rates at breakneck speed. Sprinkle in a hearty measure of the most intense 3 years of Covid lockdowns in high-rise urban apartments (which over 66% of China’s population live in), and what-do-ya-know, there’s a whole lot of toxic relationships and a whole lot less babies.
The flip side of this is occurring in Russia right now. With the Ukraine war, thousands of young Russian men have died or are soon to be shipped off to meet a similar fate, leading to a huge gender imbalance in the younger population. If a lad could travel to Russia right now, it would definitely be easier to find a lady today than it would have been on February 23rd 2022. Supply & demand baby.
In summary, the Chinese equation looks something like this:
A lack of females + unhappy marriages + 3 years locked in high rise urban apartments = not many babies
Why does this matter? Well to support strong growth you need the demographic to include young workers to provide the lubricant keeping an economy functional and (hopefully) growing. The above chart is the reported population tree of China, representing the fastest aging workforce in the world. With the population under age 5 collapsing, it is only a matter of time before this cohort rips through the rest of the population tree and causes the Chinese state to implode as the older population cannot be supported. Yep, spooky.
As a caveat, this data originates from the secretive Chinese state after Xi’s approval. For a man desperate to portray strength to the world, reporting data that highlights weakness doesn’t fit the mandate. There is a high possibility this data is inflated and overestimated meaning the situation Xi is facing is a lot worse. It’s a wonder what a few extra zeros in an excel sheet can do.
Energy
China is the largest importer of energy in the world. The vast majority of these imports come via shipping. Any strategy that focuses on a singular means of delivery is inherently risky. In other words: too many eggs in the one basket. In China’s case, their chosen basket has a noose around its neck: the Strait of Malacca. This 65km gap is a chokehold that sees an estimated 80% of China’s imports pass through it. This vital artery is the Achilles heel of China. All it takes is for a few naval destroyer ships to be parked in the gap to sit and wait to turn around any inbound / outbound Chinese vessels. Who could be capable of such a move? Australia, India, Indonesia, Sri Lanka, Vietnam, Philippines, Thailand.. all of these lads or any combination are capable of upsetting the traffic flow and that’s before I even mention the US; who have the world’s biggest, baddest and best navy in the world by a country mile.
Having its jugular naturally exposed to the world is something inherent in China’s geography that cannot be overcome. Stack this up against the real superpower in the world, America. What chokehold exists that could cut America off from the world? None. America has two massive expansive oceans either side of it which ensures open access to whatever they want, when they want. America is also a net exporter of energy due to their huge shale industry. Not many countries in the world can boast such a fact and America’s boast is by far the most impressive. These are facts of geography and facts President Xi cannot change.
As an energy importer, China currently relies on two main partners for its energy needs; Saudi Arabia and Russia.
Saudi Arabian oil has to travel quite a distance to get to China and many things can go wrong in the open ocean when nobody is around. Especially when nobody is escorting or guarding your ship. Ask Captain Phillips. All of this converges on the Straits of Malacca which as discussed, is not ideal for China. Despite the risks of transporting the black stuff, there are more risks associated with the origination of the supply.
The Saudi Arabians live in a tough neighbourhood and up to now have enjoyed support from the US. But the US and Saudi bromance is coming to an end. So if the Saudis were to get caught up in a regional conflict with Iran or Iraq, a falloff in oil exports would be inevitable. China, among many other economies, would not bode well.
Next up, Russia. China gets most of its Russian gas through a 4,000km long “Skovorodino-Mohe” pipeline and most of its Russian oil through a 3,000km long “Power of Seberia” pipeline. Increasing capacity of energy supply via pipelines by building out new ones, especially in a climate like Siberia/Russia’s Far East where its cold enough to freeze the balls off a brass monkey, is a project which would take years, if not decades. China is also wary about doing a Germany on it and becoming too dependent on Russian energy. So the prospect of a supply ramp up is limited.
Similar to Saudi, there are also risks at the Russian core. If someone suddenly put an end to the prick in charge (Putin), Russia’s energy exports could go into disarray. Hydrocarbons pumped from chilly Siberia need a constant flow through the pipes. If these pipes stop flowing, which may occur among the confusion of a sudden change/collapse of government, they will freeze over. Redrilling these wells would take years. Years in which China would suffer the most, seeing as Europe has finally pivoted away from sourcing its energy from Russia.
In summary, one thing is certain; China’s energy security is about as secure as the balls on a brass monkey in Siberia.
President Xi Jinping himself.
As the saying goes, “power corrupts and absolute power corrupts absolutely”. President Xi = case in point.
When Xi first came to power, he spent his first few years in charge purging all those who stood as contenders to his control. While his best friend in Russia, Putin was naturally blessed with an ample amount of short hotel balconies in Russia and the tendencies of political rivals to take long walks off them. Xi didn’t take as heavy handed an approach but many were silenced or jailed with the keys lost down the back of very deep couches.
Once the spring cleaning was complete, Xi then took aim at any individuals competent enough to potentially one day challenge his control. This level 2 purging was far reaching with even the likes of tech billionaire Jack Ma getting caught up in the mix.
To refer to the Chinese government as an administration is incorrect. Xi is surrounded by Yes-Men advisors who are incapable of advising. The administration has been gutted and swept clean of anyone with a pair of brain cells or enough balls to say no to President Xi. This is the Xi show. Compare this to Putin, who took a similar approach but at least left a core few competent advisors to tell him what’s what (whether he listens to them now is a different question).
The repercussions of this purge of intelligence is perfectly highlighted with Chinese Spy Balloon Gate; the most silly thing any sovereign leader has done in the last few decades. And that’s including Boris Johnson’s gaf parties during covid, Joe Biden confusing the “All Blacks” with the “Black and Tans” during his visit to Ireland, or even our own Michael Healy-Rae (thankfully not a world leader) while trying to legalise drink-driving for rural communities stating, "When a drunk driver is driving through the mountains at 4am and hits someone, it was probably a drunken pedestrian they hit. Who's wrong in that situation?".
Attempting to float a contraption 3x times the size of a Dublin bus unnoticed over US nuclear missile bases to gather info shows how desperate and silly Xi is. Unless firing a missile, the doors to the silos are closed, so nothing can be gathered that cannot be gathered from satellites. The Americans saw this yoke slowly approaching miles off and once in their territory, they hovered a U2 Spy Plane with Whisper Sensors over it during its entire visit. From this they would have gathered everything the balloon was technologically capable of during operation. Then, once the balloon was over shallow waters they shot it down and easily recovered it for more analysis. Xi gained absolutely nothing from this stunt and simply handed his rivals a piece of equipment which would amount to a treasure trove of information regarding the Chinese military’s capabilities. This was arguably the most significant intelligence coup of the last few decades.
Cursed by his geography, expect Xi to get increasingly erratic as he attempts to stop Mother Nature from pulling his country back to reality. With his population turning unproductive, his energy supply out of his control, and his own circle of advisors hallowed out, President Xi is pinged.
Regarding the Straights of Malacca, it would not take even a few destroyers. One or two mine-layers would do the job. Actually, just the threat of mines would be enough because the insurance companies would pull coverage on all merchant ships in the area.
I agree emphatically with two observations:
1. the one-child policy is everything, demographically. this is almost checkmate for an aging population that will be increasingly expensive to take care of
2. Xi has clearly chosen to consolidate personal power above being challenged to test the quality of his ideas
I don't see China becoming the dominant global economy whatsoever during the 21st century.