I just can’t see the PRC and the CCP in its current form sticking around long enough. Between their demographic collapse and pushback on globalization amongst some of the largest nations and economic zones who trade with China (not the mention China imports most of its food), we will see the CCP take an even firmer grasp just before it either collapses or disintegrates. We will likely see the largest cities revert to self-governance and then we will have a better understanding of the geopolitical landscape in which we will all operate in. If Hong Kong‘s economic and political influence positions it to self-govern once again, perhaps taking much of Guangdong with it, we may see more respect for global IP protections.

Is fragmenting into city states more likely than the CCP continuing to change, as it has over the past few decades?

Chinese cultural identity, centered around Han dominance and collectivism, has been a unifying force for quite some time. HK was a major exception because of British influence, but I have a hard time seeing the rest of the country willingly breaking up rather than just slowly forcing through change.

ground breaking novel analysis: china is going to collapse any day now. for real this time. maybe if we keep repeating it enough, it will happen.

PRC global trade increased by 1 trillion with a T in the last 4 years, more than the prior 10 years. That's the greatest expansion in globalism... ever. Most with the global south, some of which is redirected trade to western block who realized they can't decouple but only derisk while the PRC has increased global integration more than... ever. Meanwhile PRC is moving from 25% skilled workforce to 60/70/80% like an advanced economy by spamming ~5M stem per year - for next 20-30 years they'll be reaping the greatest concentrated pool of skilled labour demographic dividend... also ever. Maybe post 2060s demography will be an issue like JP whose problem is they couldn't replace skilled labour at parity and even then they just merely stayed... very competitive. That's what a PRC "collapse" will look like, a massive Japan (as in multiple Japans) where median projection paints 2100 PRC as the second largest country with a skilled workforce many times larger than 2023 PRC. Conveniently, also one that doesn't have to import calories/energy. That's the problem with focusing only on the demographic pyramid and not actual demographic workforce composition. Yes PRC will have demographic challenges, but demographic trends also point toward overwhelming PRC global competitiveness and geopolitical security.

PRC global trade is propped up by extremely low-value, often non-essential goods on the export side and they import much of very essential food supplies and some other raw materials to make these goods. We have already seen a shift in manufacturing to Mexico which benefits the US with a skilled labor force enjoying low CoL, all within the North American free trade zone.

Low-end semiconductor manufacturing is one of the last essential things the world imports from China, but much of this is already moving to Vietnam. Medium to high-end semiconductor manufacturing largely takes place in Japan, Taiwan, and the United States - all of which are allied together and will respect export restrictions. We will see Germany (another ally) step in once their fabrication facilities are complete and operational, maybe by 2026.

Calling their wide-scale demographic collapse as merely “challenges” is disingenuous. This is a looming complete and total catastrophe that will spark a humanitarian crisis, the likes of which the world has not seen before. Their short-sighted one child policy they had into place from 1979 to 2015 has robbed them of more than half of their 30-40 year olds, people at their prime working age, just as their parents are entering retirement. The legal obligation of children to take care of their parents in their old age had put additional burden on the single child of each parental union. These adult children are putting off having a family of their own due to this. This cycle continues.

And this is just the stuff we know about. We likely won’t even know how many people died of COVID-19, what are the figures of major events that we don’t even know about? Disinformation campaigns stamp out people speaking ill China, but when all this comes to a head, it will seem sudden but will the crescendo of compounding events, falling onto the next like dominos.

This is like 2005 understanding of PRC economics and comprehensive power.

2023 PRC isn't capturing $8 per iphone 3g in assembly anymore. She captured $100 / 25% BOM since iPhoneX. Current trend of PRC+1 reshoring (derisking) is moving low end industries / labour to cheaper labour regions while PRC moves up intermediate goods and value chains. Hence why PRC exports to Mexico increase proportional to Mexico exports to the US. Mexico is finishing PRC intermediate goods to evade tariff. What we have seen is PRC becoming more and more indispensable and integrated throughout the global value chain.

Actual low end semi production is expanding massively in PRC. Medium end (12nm+) expansion is going to be mostly in PRC, because it's capturing market share in worlds biggest semi market that western fabs will increasingly lose due to export controls. What you're seeing is west strategic expansion of fabs that will lead to bloc overcapacity. Most of those fabs will only be viable via state subsidy. This isn't even going into capital goods / machinery that RoW are increasingly dependent on the PRC to try to re/industrialize at all. It's not what PRC makes but how much of everything that she makes that positions PRC to be indispensable trade partner for at least decades.

Repeating the demographic collapse narrative from Zeihan tier analysis is disingenuous. It's a manageable challenge / transition because PRC demographers aren't retarded, this is one area where they actually had a long term plan and are mostly meeting expectations. There's a reason PRC society has ~90% (87 urban / 96 rural) home ownership and some of the highest household savings rate. Old cohorts who saw QoL expand hundreds of times, simply do not have expectation of massive state welfare program, or increasingly being taken care of by kids. The entire dependency ratio / confucius obligation is orientalist projection that overlooks the fact that in aging countries like JP, old people just kind of rot and die unceremoniously. That’s where cultural expectations are currently trending, elderly don’t want to be filial drag on the next gen and are going to die quietly in their house with their nest egg. And what happens when they die? Up to 8 household wealth transfers to a couple who have increased consumption and family planning options. Will some families get fucked, of course, but you know which cohort will see large intergeneration wealth transfer dividend, the educated/skilled ones whose pushing PRC up the value chain.

Meanwhile PRC family planning prevented like 200m-300m excess births, when west is meming about PRC youth unemployment, which at 20% still means 80% of a very large number of skilled workers are being integrated into PRC economy. Much more than US integrates via immigration. It’s very difficult to make 6-8m new jobs for youth, especially high skilled every year. Nevermind double that. See PRC still has 600M farmers + low skilled workers stuck in the informal economy. They’re productivity drags. Reality is avoided adding another 200m-300m mouths that system wasn't scaled to deal with. Current TFR lower than planners want, but right now PRC is where roughly demographers were aiming and planning for.

PRC is also food self-sufficient in caloric terms. Agri imports mostly bulk animal feed and luxury items that don't undermine absolute food security. Not that it matters since she's shifting away from western agri to BR/RU/global south. And really this entire obsession with PRC food imports is dog whistle for PRC food insecurity, in which case, the US has exactly as much food and energy security as PRC because any disruption of PRC energy SLOC is going to be met with disruption of CONUS energy infra. Fortress America is over. PRC can starve US as much as she can starve PRC.

The entire idea that the PRC is unknowable is stupid. Incredible amounts of info on PRC is available via one of the largest western diaspora in the world. The problem is people choose to double down on the dumbest PRC collapse narratives from analysts with piss poor track records or outdated info that’s no longer relevant because US gov literally spending 100s of millions to seed disinfor about PRC while useful idiots wonder why PRC is not collapsing due to XYZ stupid reasons.

> I just can’t see the PRC and the CCP in its current form sticking around long enough.

I took an upper-level course from a China expert in 1989. At the time, a big question was exactly how long China's government could maintain national unity unity in the face of the many contradictory forces pulling at it. Turns out the answer was: longer than a lot of Westerners thought.

It's not even the same system though. When some Chinese company gets big enough, they just get partially or wholly subsumed by the government in a quasi-nationalization. IP and patents don't have much meaning in such a system. They aren't even much protected from themselves, much less from foreign pirates.

They're not quite communist but they don't protect individual property rights to the same degree that we do. If we stole their designs they'd probably just shrug, but we'd still have to contend with our own laws and domestic competitors and international trade agreements with other Western nations, while they just continue on their merry way, growing and growing while securing logistics and supply routes from a bunch of small countries and mines.

At the end of the day, their system can more efficiently organize national production around some shared goal. Ours allows more independent experimentation and a faster pace of innovation. But once they have their minds set on something, collectively, I don't think our market would be able to keep pace unless we keep being able to technologically leapfrog them. But that can only last for so long, especially as our education continues to weaken...

> At the end of the day, their system can more efficiently organize national production around some shared goal.

That sounds like propaganda. Oligopolies are historically hilariously inefficient, and China's brain drain hardly seems like it portends well for them:

https://www.wsj.com/articles/chinas-brain-drain-threatens-it...

https://archive.ph/ACMyG

https://web.archive.org/web/20170225132236/http://www.nytime...

https://www.independent.co.uk/news/world/asia/china-s-millio...

PRC state driven industrial policies are hilariously efficient against entrenched (western) incumbants, because the alternative is to not be competitive at all since new competitors simply can't compete against moat of established western companies with resources that rival government funding, no less US cheap money. PRC scale is large enough to do that, meanwhile most countries countries/blocs too small or uncoordinated to even try.

That's why US/west copying PRC industrial policies, because PRC industrial policy is initially "inefficient", and then they become absurdly efficient, saturating domestic market at first, then export massive surplus to globe, and eats away at western shares. Analysis of PRC moving up value chain and global export share on PV, telecom, android smartphone, display panel shows reduction in operating margin of leading companies by 50-90%. Hence US is trying to stop PRC semi. And I'm guessing west on PRC EV soon. Because the efficiency of PRC indy policy is also measured in making western companies less productive.

As for PRC brain drain, Chinese academics/talent in west floating back to PRC in record numbers. Those are good portends vs statistically insignificant % of millionaires trying to hide their money abroad. Which entire ignores the fact that PRC generates so much domestic talent now that west can't meaningfuly braindrain even if they wanted to. PRC is in process of milking the greatest high skill demographic divident in recorded history. It took PRC 20 years to build up ~15M STEM talent to catch up in west in most sectors except extremely difficult integration projects like aviation and semi. She's generating that much talent every 3-4 years now.

The PRC bet on Russia's invasion of Ukraine and got burned. Their constant whining about Taiwan and childish insistence that Tienanmen Square never happened makes them the laughingstock of the world. Their continued support for the demented lapdog regime in North Korea is similarly laughable. Their deification of gangsters like Mao and Deng puts them on a par with other unserious regimes as North Korea and the former USSR.

China's massive digital divide is shameful, as is its neglect and brutalization of ethnic minorities. China's sexism is notorious the world over, as is its noxious pollution and the utter disregard its companies have for environmental laws. There's little for the West to copy, and even less the West should copy.

i can tell you watch a lot of youtube videos on why china is bad.

I’m not necessarily disagreeing but “you’re wrong” is much less compelling than “here are some concrete ways in which your list is misleading”.

There's posts elsewhere in the comment thread with concrete reasons. I'll horribly paraphrase them: the demographic collapse is less of a problem than westerners think because China has a high home ownership[0] rate and home-owning adults are way more likely to have children. Old people will just die alone and unloved in China like they do in Japan. China captures enough of the electronics value chain that existing 'derisking policies' practically amount to 'move final assembly to Mexico to evade tariffs.' They're nowhere close to being food dependent.

I'm not entirely convinced by this, of course. But it's important to note that headwinds are not brick walls. And even the inevitable next collapse of the Russian Empire will probably not happen for years, if ever. There are levels of survival that the elites who run sovereign states are willing to accept.

[0] On the timescales of normal family planning, the difference between home ownership and a ninety-nine year lease with no rent payment is immaterial.

It's not really propaganda but a real-world challenge for us. I worked in the American solar industry and in the span of a few years, China went from irrelevant to eating up most of the world's producers and production. Now they are the overwhelming source of most of the world's solar panels and the American and European companies largely folded because we just couldn't compete with their combination of cheap labor, advanced factories, and state sponsorship.

China has its problems and its risks, to be sure, but it would be dangerous to underestimate their hybrid model of quasi-capitalism, quasi-communism. What is freedom limiting at the small scale (why would I innovate when the government owns me) can become absolute beasts at sufficient economies of scale. When they decide something is of national priority, they can top down refocus much of the national productivity (both money and people) towards it and then spin up a multinational logistics chain behind it across Asia and Africa. Then they scale up and dominate. It's happened to many industries already and just saying "China bad" isn't going to stop it.

It's like a game of Factorio played well, except with a billion workers and a lot of money that can be moved around at will. We see similar effects in the West during controlled wartime economies (when production can be directed to a particular cause), or government subsidies and money injections (like during covid, or with the infrastructure bill). It's also how our military is run, for example, and most of our big companies. Top down control economies have certain efficiencies (and inefficiencies) of scale that a bunch of small businesses don't have. But when it comes to commodity manufacturing, it's hard to beat their hybrid approach.

Which is IMO fine for PRC since it's manufacturing base can always out compete west on cost. The real issue is IP law protects incumbents, predominantly western companies. Stats from a few years ago was PRC was paying $6 in IP to US for every $1 it took. It's a rigged game with rules made by west to benefit west. It's unsustainable. As PRC catches up, would it like a world where their IP gets respected? Yes, but the second best is a world where western IP gets increasingly ignored because that deals disproportionate damage to those with most profitable IP portfolios.

It's a tale as old as trade itself, and the US was just as guilty in its infancy:

https://theworld.org/stories/2014-02-18/us-complains-other-n...

Prusa's comments here are very important. In this specific case, China is not "stealing intellectual property" in the sense that they are using it without a license; they are literally stealing title to the inventions in question, which is way worse.

Of course, the obvious solution would be to not respect international patent priority from China, but that is tantamount to fighting a trade war, which has significant strategic implications. You can't sue the US to force them to de-normalize trade relations with China for the same reason why you can't sue the US to force the army to nuke China.

It's not easy to go from catching up to leading... Maybe China can but it seems far more likely that they are destined to settle in a few miles behind the west like the rest of the Asian tigers.