On May 11, 2023, I chaired a private event discussing this globally important topic with a panel of experts. This is a synopsis of that event, with Chatham House Rules applied (Peter Zeihan excepted).
Thank You very much Michael
Thanks again for you great insights! Would like to pick your brain on the theory suggested by below article about how dual currency swap between China and countries like Argentina can potentially drive down offshore RMB and depleting reserves, eventually threatening HKD. I have never thought about how RMB “globalization” could be used as an arbitrage by these countries.
the link is in traditional chinese
I've been familiar with PZ for years and know his China argument well. I thought this article was a great summary of why China may be doomed, but I'd be interested on your take. In what way could this argument be wrong? To your mind, what is the most likely way in which China may be able to reverse its fortune and not succumb to a collapse caused by shipping blockade/energy blockade/lack of agricultural prowess/etc.
спасибо большое! Очень важно и интересно!
Thanks for sharing, I liked the podcast ep you did with Grant. I'm typically not a huge Peter Zeihan fan. I find a lot of his prognostications to be embellished.
I'm hung up on the following:
1. Peter: “All it takes to destroy China’s industrial and economic position is the Americans going home. They cannot function without the US Navy in play.”
- Why? If you assume the US is voluntarily leaves the Pacific theater or is kicked out by China by a massive offensive, wouldn't the logical conclusion be that China now being the dominant regional navy would dictate terms to our allies? If not, which countries would coalesce to deprive China from access to the seas? If the economic implications for China are to be such a deterrent to this scenario, wouldn't those same implications apply to Japan/SK/Ph?
2. However, its lack of large vessels (like the supercarriers of the US) prevent it from breaking far outside of the First Island Chain.
- As I understand it the US does have more sophisticated carriers. But if this really is difference maker, what is really preventing China from realizing this and building their own super carrier fleet? Is it the nuclear component?
3. “It will be easy.” No, Taiwan will be much harder to take militarily than Ukraine.
- This assumes a willingness on Taiwan's end to engage in a protracted war against the China. I also have little conviction that the RoW response would be akin to Ukraine since China has a lot more sway. What is the equivalent to the EU/Nato that would put up a fight against their factory?
4. “No one will say a word because China is too important to international commerce.” No, the opposite is happening given the re-shoring trend.
- I own a business, I still have about half of my production in China. I've already re-shorred 50% of my production in the US and Mexico. I've made visits to Mexico and I have sourcing agents actively looking to find partnerships to move production away from China. Many components I am still unable to source in Mexico. I also think that the larger and more geopolitically important the US company is, the more friction they will encounter when trying to re-shore.
5. Even if China did take over Taiwan, it could not run TSMC by itself unless the RoW sanctioned it. And if the RoW rises up against China and cuts off its energy routes, it would mean the end of Industrial China and its ability feed its population.
- I also think China has similar ploys it can pull that would equally cripple the US. For instance, I think it's reasonable that China could cause massive domestic disturbances relatively easily by attacking our infrastructure, knocking out satellites, etc.
Thanks so much for sharing.
Interesting and insightful! Thanks. I was unable to locate the podcast on my iPhone (Kaos Theory) :-)
Stellar as usual, thank you so much.
I have seen coverage about the health of Putin and Kim.
Has anyone reliable looked into Xi's health risks, hereditary factors or from personal habits?
A stellar lineup, thanks for sharing!
Well done sir. Thanks for allocating the time and effort to provide this. Bravo.
Pretty sobering and a bit heartbreaking that we humans achieve such great things in so many ways. Yet just can’t seem to get along in small neighborhoods or nationally!
Very interesting and insightful. Thank you for sharing this feedback.
Nick Glinsman and Harald Malmgren in today’s “Ahead Of The Herd” report corroborating Peter Zeihan’s assertion that the reshoring trend, while Inflationary, will lead to a growth boom in North America:
“Deglobalisation is leading to soaring construction spending on US manufacturing plants”
This just accelerates the reshoring trend, imho.
ST pain / LT gain for the US, and ST pain / LT pain for China.
Great post. The only thing I will add is that the Age of Oil is effectively over…we are now in the Age of Natural Gas. Oh, and America is the Saudi Arabia of NG and we are on the path to energy dominance by exporting LNG. Our energy situation is insane considering of where we were in 2008 mired in quagmire initiated to liberate underperforming oil reserves from a sanctioned dictator.