That hidden money is overly leveraged, ie debt, and you'll never know if tomorrow you'll get your original value back. China is the most indebted country in history.
How do you know that for each $1 hiding in accounting magic is not being resold twice? We don't, because of what the article says.
Last time I checked China was ~23T in debt vs USA’s ~32T. They also have a population almost 5 times larger.
Private credit is what brought the 2008 crisis in the USA. The public debt wasn't the problem before, but it was after: using public debt to pay private debt from banks.
And that's what the article is also talking about: China keeps the USD in their own banks and prints CNY to spend, but how many USD for how many CNY is not clear.
It's pretty much a Ponzi. As long as people don't ask their USD back from their CNY it's all good. Good luck when people starts asking USD from China.
China TOTAL private credit in CNY is available here:
https://zeihan.com/wp-content/uploads/2022/05/total-private-...
You can also see how much money they printed here:
https://zeihan.com/wp-content/uploads/2022/04/global-money-s...
Which doesn't mean he's wrong, but I do think it is important to consider incentives whenever someone is attempting to convince you of something.
Do you have any data to back up any counter argument?
Is the data the whole story? Are there mitigating factors? Does it need mitigating factors to begin with? I don't know. I even explicitly mentioned he could be totally right on this specific point.
I'm simply stating that there is a caveat around the source of those graphs that interested parties should take note of, for the same reasons we ask scientists, journalists, etc., to disclaim any potential conflicts of interest they have.
Argentina's public debt has been pretty stable and on GDP terms it was quite low. But even then, on low public debt, a country can totally wreck the whole economy.
Because we print pesos, ARS, like there's no tomorrow and then people get surprised when we get inflation and a total wreched economy. Then populists start blaming the usual suspects: IMF, USA, EU, the f weather.
People confuse public debt with private credit. The general idea in Argentina, including Ministers of Finance and Central Bank officials, say that ARS credit is not real debt.
Move forward 20 years and you get Argentina.
Edit In Argentina, private credit ARS bonds are called LEBAC and LELIQ for those who are interested.
Per the graphs, you're falling for unsubstantiated (borderline retarded) Zeihan visualization/narrative, this time by scaling to 2000 baseline and annotating Zeihan TM wild claims. PRC debt is ~2900% of 2000 baseline, GDP (and per capita) is ~1500% of 2000 baseline. All the graph is reflecting is PRC has built 2-3x debt in 20 years during it's most explosive and condensed development phase where urbanization (and home ownership) increased from 30-65%, i.e no country has been abel to modernize this fast. EVER. For reference, 2020 PRC national debt was ~55% (+20% in 10 years) of GDP vs US was ~140% (+40% in 10 years), total aggregate debt (the #s Zeihan is meming about) PRC ~270% vs US ~800% in 2020.
I don't know what the money "printed" graph data comes from, but PRC covid stimulus/money printing so far retraint vs US 13T. There's reason global economists was hoping PRC would spam the money printing brrrt button to uplift global economy. Meanwhile PRC Q1 inflation rate was ~1%, lowest amoung major economies. Again, that's not remotely reflective of actual Argentina ponzi economy, to the point of being diametrically opposite.
Also this is USD used for reserve, it's USD PRC hoovered up from massive trade surpluses in the first place. PRC exports has increased so spectacularly in the past few years (export value grew from 2.5T in 2019 to 3.6T in 2022). PRC exports grew as much in last 4 years (~1T) as it did in decade between 2008-2018 (1.4T-2.4T). So she's holding a lot of dollars, even if she wants to hold less. Hence trying to increase rmb settlement. In the meantime globe is still shovelling money at PRC, the problem isn't getting it, it's getting rid of it.
Rivers in mountains and low quality soil, not connected to any productive land. Look up any map on agriculture land and you'll see their soil quality. It's bad. Compare that with the USA and Argentina. We have both the best in the world.
Then look up how much fertilizer is used in their agriculture, per hectares of arable land. It's bad.
https://data.worldbank.org/indicator/AG.CON.FERT.ZS
There's more advanced graphs here to see the relationship between fertilizer and crop yields:
https://ourworldindata.org/crop-yields
All your numbers may be okay. But the main Zeihan argument is two fold: first, the same from the book "Why Nations Fail". China is not great in their political institutions. It's bad. For example a HN from YESTERDAY:
https://news.ycombinator.com/item?id=36554818
The second Zeihan argument is demographics. After the One Child Policy, China is the country where population is getting older faster in history, and faster than any other country today. It's bad.
Look up the data:
https://ourworldindata.org/grapher/median-age
There's a direct relationship between median age and inflation. Because older people consume more than produce, lowers productivity, and that increases prices. From the IMF:
https://www.imf.org/external/pubs/ft/fandd/2016/03/juselius....
You may keep inflation down when population ages. But that just destroys growth, for example Japan. And China economy depends on growth.
On soil/ag, yes per capita PRC land/water resources limited, but reality is PRC is increasing absolute food security, per capita staples production went from 350kg to 400kg over 20 years with 200M extra people. That's absolute food security in terms of calories. Which BTW since population are net declining, resource stress will only reduce over time. Fertlizer consumption also digression, it's mainly due to PRC choosing to (successfully) spam fertlizer while taking time to figure out GMO agri policy and agriculture being makework jobs or 200m famers when really GMO+automated large scale agri can optimize. It's a politcs issue being addressed, but it's not the wanking material PRC collapsists want it to be. Yes it's more constrained than US agri powerhouse, unless full blown maritime war (queue Zeihan blockade meme), in which case everyone, including US will starve because reality is, PRC conventional missiles can take out 150 US refineries to stop most energy/agri inputs (including fertilizer). Because once again, POLITICS, in this case technology, can trump geography. I surmise Zeihan will still laud US shale/energy autakry when reality points to US losing actual energy security because gunpower can now pierce his "fortress America".
On PRC political instutions, they're fine/great. His entire argument over cliques and wealth transfer between provinces (which US does between states), is more PRC collapse talk for his audience who laps it up. Like PRC didn't become first competitor US seriously worries about threatening US primacy since WW2 (i.e. more so than USSR) for doing a "bad" job. For reference most of PRC defense modernization, moving up value chain, leading innovation/R&D indexes happened in last 10 years, after Why Nations Fail. To throw Zeihan bone, his assessment on PRC military might have been closer to truth in the 2010s based on info from 2000s, but this isn't 2000s anymore. There's a reason Zeihan doesn't get invited to any credible think tanks to talk - he doesn't actually know much of the politics.
On demographics, this is where popularizing of simplistic Zeihan analysis from naive population pyramids readings generates the most basic collapists narrative. Especially when talking about geopolitics / strategic competition. It's not just the general demographic trend that determines outcomes - it's not subsistence farmers driving up productivity and building national power but skilled labour coordinated at scale. Most of East Asian tigers with shit TFR grew massively and are leading various strategic tech industries because they simply had more aggregate talent than previous generations. Now consider PRC is generating more STEM than OECD combined (~5m), because even with bad TFR and 20% youth unemployment, PRC massive population baseline is producing the greatest high skill demographic divident in recorded history. Without exaggeration, literally never in human history will so many educated / skilled bodies been produced and coordinated within one country, multiple times more than US an absorb via immigration. Sure, PRC net demographic decline might be a factor starting in 2050s (not a death spiral because PRC high savings/ownership insulates), but for next 30 years, and especially within frame of Zeihans geopolitical competition, PRC has the greatest demographic potential in the world, , and it's not even close. Consider 2000 PRC GDP was ~1T @ ~2M STEM grads, 2022 GDP ~18T @ ~17M STEM. All recent news of PRC leading in various S&T, R&D, industries etc? Lag effect from 2010s when PRC had less than 17M STEM. Now project to 2030 with STEM @ ~50M, likely topout ~80-100M @ 2050. This simply reflects PRC demographics moving from 25% skilled work force to 60-80% like developed countries, i.e. it's not going to stagnate like JP who simply can't produce enough skilled talent at parity. PRC for next 30+ years is going to gain significantly more productive people even if there's less people. And when they stagnate/decline from when net population loss actually effects that cohort, they'll be doing so from a much higher baseline than now. Also less net people = less import dependency which Zeihan likes to wank about. TLDR is PRC relative to geopolitical constraints, currently has probably the the most FAVOURABLE demographic trends for geopolitical competition.
No.
Despite its domestic production, China has been a net importer [DOC] of agricultural products since 2004. Today, it imports more of these products—including soybeans, corn, wheat, rice, and dairy products—than any other country. Between 2000 and 2020, the country’s food self-sufficiency ratio decreased from 93.6 percent to 65.8 percent.
https://www.cfr.org/article/china-increasingly-relies-import...
> On PRC political instutions, they're fine/great.
No.
China’s economic freedom score is 48.3, making its economy the 154th freest in the 2023 Index.
https://www.heritage.org/index/country/china
China’s authoritarian regime has become increasingly repressive in recent years. The ruling Chinese Communist Party (CCP) is tightening its control over the state bureaucracy, the media, online speech, religious groups, universities, businesses, and civil society associations, and it has undermined its own already modest rule-of-law reforms.
Score: 9/100.
Quoting freedom index, from heritage and freedhomhouse no less as proxy for state capacity is more asinine than using Zeihan stats and deserves even less of an effort response.