The Ongoing Collapse of China (Incoming Disorder)

China is unmistakably one of the most controversial nations in recent memory. Violations of Hong Kong's autonomy, what are effectively Uyghur concentration camps, infringements on sovereign territory and others. Many declare it to be the next superpower, displacing (and some say they already have) the United States.

This is an objective falsehood.

This article concerns the coming declines, collapses, riots and violence that greets China in the near future. Economic slowdown, nationalistic wars, trade imbalances and import inabilities are about to come to the world's second-largest economy.

Explaining Growth: China's Basics
What is lost in much of the debate about China's future is how it got to this position in the first place. Multiple commentators would have it pinned on a 'superior working culture', or 'innovation'. This is not the case.

To explain the incoming Chinese conundrum, we have to get back to China's history. In the article Decline of Globalism, I outlined the fundamental Chinese characteristics in a brief manner. Here they are once again. To unite a nation anywhere close to as fractured as the Chinese region, one requires stability and an economic bribe that will keep people interested. In the modern age, the International System fufilled both requirements - by removing Japan from China, and by global trade. The Chinese economic system is import-based and with the stability offered by having no need to defend against attacks can turn its attention to controlling the rebellions in Southern China and the occupied territories of Xinjiang and Tibet.
 * Northern China is the political core of China. Or better known as the Militaristic core. This is because of a curious thing called the Yellow River. The Yellow River is ridiculously violent. The 1938 flood (which admittedly was a Nationalist tactic to prevent IJA advance) killed anywhere from 400,000 to a million people and displaced millions more. This means that it was a requirement for any power there to control the river - historically, using levees. Chinese society developed heavily along these lines of authoritarianism because of a need for control. Work gangs and the like developed the sides of the Yellow in what was the first and probably most consequential Chinese infrastructure project. Unfortunately for Northern China, that meant the Yellow River was less a navigable, logistically useful region than a violent piece of crap that you had to pour tons of resources into. And there was no alternative. It meant that Northern China looked much like the German Confederation minus the rivers. The silver lining is that the Northern Chinese Plain is incredibly fertile and immense in size. Thus, to rise in Northern China meant that you could never look beyond what you had right there and then (that plays immensely importantly into Chinese culture.). You had to learn how to manage the levees and the tons and tons of competitors to your control of the region. You were rewarded for being clever - not really on the innovative side. This meant technology never developed and living standards stayed stagnant because there was no excess capital to put into such things; a single flood being all that was needed to end your control.
 * Central/Inner China is the economic core of China. It boasts of the Yangtze River, technically 14 and a half thousand kilometres of navigable river. Here are its problems: it doesn't connect to Northern China and thus lacks the food it so desparately needs. The Yangtze is impressive, sure, but it also isn't as nice as that description earlier might portray it as; going right through endless mountain chains and on multiple stretches lacks any viable floodplain for any agriculture along its banks. This further prevents political unity, but makes it ridiculously easy to engage in Sinicisation - the process of assimilating others into the Chinese culture - one by one. The method by which both North and Central were united was by building a huge canal that would give them economic linkage and food access - the Grand Canal. Canals are odd things; on one hand, they do offer the logistical benefits of normal rivers - the other, they need to be maintained and it is ridiculously expensive to do so. This was - is - especially true for the 1,100 miles (or as we Commonwealth chaps call it, 1,700 kilometres) Grand Canal. And thanks to those mountains it cuts through, the Yangtze's supposed 14 thousand kilometres of navigable river are mostly seasonal or shallow - reducing the consistently useful amount of navigable river to just about two and half thousand kilometres, far less impressive. To put that into perspective, Germany, with the River Elbe alone, beats this number. This isn't even to mention that a mountain chain between Shanghai and the rest of the region means that its part of the region would very much prefer Tokyo, Taipei or San Francisco to Beijing as business partners.
 * Southern China is where the last Chinese dialects persist and for good reason. All those mountains that kept central China divided give it a huge amount of buffer from its Northern counterparts. In fact, Southern China itself is a complete mess of hills and horrible landscapes without any navigable rivers. No good coherent power has ever risen there. Add that to the fact that unlike the rest of the entire country, Southern China's natural ports are plentiful thanks to a deep and indented coast, and you get a region that enjoys interacting with Southeast Asia, Japan (shudder for the Chinese nationalists), the British and anyone with a boat who can get them food and the resources. The result is cities like Hong Kong, which while officially Chinese would quietly (and sometimes not-so-quietly) trade with foreigners over their own 'countrymen'. This is why only the South gets zero political representatives in Beijing, and Hong Kong's increasing non-usefulness as a port will further make Beijing intent on throwing away its autonomy early.

Here is where the Chinese economic system gets interesting. The overall goal of China's economy is not profit, but employment. Statistically, that was fine for China's period of strong economic growth from 1980 to 2008. After all, employment was created easily in a time of an economic boom. The problem stems with the fact that most of this was completely untenable and reliant on the economics of a strong demography.

To put it very, very, bluntly, the Chinese don't have any 'superior culture' to the West that allows them to churn out so much. What they did have was 700 million politically disinterested young to middle-age workers that supercharged the economy by building houses and roads across the country. The problem is, none of that was then converted into sustainable, long-term jobs that would outlast the initial boom. The jobs disappeared in 2008 and never came back because that was the same year many of these workers began to retire.

This is where things get dicey. Every single year since 2008 Chinese banks have gone into overdrive lending. The four major state banks of China are now engaged in what one could say is a Ponzi scheme-inspired tactic of lending each other money whenever they need to lend others money, essentially promising an unlimited amount of capital that cannot be maintained. Include the shadow loans that began in 2013 and you get the picture of a country that is sky-high in debt; or more crudely, is Scrooge McDuck-diving into billions of debt.

The lending isn't to keep existing jobs alive; it's to create dozens of new ones, even if completely and utterly untenable. One of the best examples of this ethos is the recent bike-sharing craze that struck China's cities. Rather than keeping a large fleet of well-maintained bicycles, various different companies all opted to churn out thousands and thousands of them at low cost and just abandon them. This led to complaints and eventually most of the companies shut down. But it displays the clear and utter fact that Chinese capital simply has no viable direction to flow. Either way, it's going to be a shitshow.

Another place where all that lending went: crazy, foreign projects. Soybeans in Brazil was something no one would have considered on a good day because it makes no returns. But for the Chinese, it was no dealbreaker to have it make practically no profit - and they did it. Dozens of these projects litter the world, all in the name of employing people.

Culture & Demography
The part of the problem where this becomes irrecoverable is simple: China's demography.

While Japan is best known for having a terrifically grey population, China's on track to have almost if not just as many retirees as a percentage of its population in about... a few years. At this point, the average Chinese citizen is older than the average American. This means a few things for China. And here is where we have to come to the Chinese culture. Because above all, this is what will spell the downfall of China from the world's rising star to a discount Soviet Union.
 * One: The supercharged economic growth that was brought on by a large, young population is dead. This sort of population usually creates a large impetus to bring jobs, because simply put - it's cheap as hell. But now, with an aging population, unskilled labour in China has become too expensive for the foreign businesses that came to China to keep. It's running off to Vietnam and other countries; and for American companies they're running to Mexico.
 * Two: Every bit of Chinese growth you currently see is residual from innovation that popped up in the mid-2000s or propped up by Chinese loans. None of it is natural. In a normal economy, this would be stagnation and a cause for more long-term thinking. Instead, the Chinese Communist Party decided that the most efficient method would be to supercharge what they had left and hope for the best. They have literally spelled out disaster for themselves.

Simply put, go back to my explanation from earlier. The Chinese culture was created from the crucibles of necessary authoritarianism. A collective led by a definitive leader, with orders top-down. This has created a lot of horrible side-effects. This is the truth about the Chinese nation. None of it is natural. None of it should have happened. But with international trade, this is precisely what occurred. With security came economic prosperity. With economic prosperity came propellant that drove it to the top of leaderboards.
 * The male-to-female gap is further reinforced by a culture which values males above all. This is a recipe for artificially destroying your own demography (which by now China seems to be quite proud of).
 * 'Face culture' is ever-apparent in the Chinese system. While it is strong in Korea, Japan, and to some extent in Taiwan and Singapore, it is part of the basis that creates the modern Chinese economy. Decline is a sign of weakness - even if a reasonable loss that can be taken - and only continued and infinite positivity is tolerable. This makes convincing switching gears to a long-term system nigh impossible.
 * Innovation is practically a luxury. While it is true that the Chinese created, among other things, a compass, an earthquake detection system, and others, almost all of it was quickly abandoned. And this is where I truly need to emphasise the term 'luxury'. Throughout Chinese history, the only two inventions that persisted were paper and gunpowder, but thinking about it thoroughly those are not inventions of innovation, but rather of culture and necessity. In China, if control is to be exerted then naturally recording is required. Hence why the Chinese had to create paper. Gunpowder was not even used as a major part of military applications until it came back from European soil with the new invention of muskets in the late 16th century[1]. Come by all this and you begin to realise that if anything, Chinese innovation is far more fragile and far more subsceptible to public furor than if it was elsewhere.

In a few years almost all of this will be gone. The signs of desperation have been showing since 2013, with the ascension of Xi Jinping:
 * The Chinese government is now making a push to exploit Xinjiang's resources. It's a costly venture that will take billions and decades to make good on, but they're doing it regardless. The recent crackdowns in Xinjiang have all been to free up jobs previously occupied by Uyghur residents and give them to loyal Han Chinese people, driving unemployment down[2].
 * Hong Kong has come under threat. This is not the Chinese exercising arrogance over Hong Kong - this is Beijing being genuinely scared of the secessionist traits of Hong Kong and in general Southern China. While they may be afflicted with a face culture-induced insecurity, do not mistake that for a lack of knowledge amongst the ranks of the CCP. In the CCP's eyes, even if it endangers the miniscule possibility of reunification with Taiwan, keeping Hong Kong's highly-educated population under control is a necessity. Beijing's attacks on the city will not end with Carrie Lam.
 * In recent years Chinese investors have been buying up property in any country that is not China and has a relatively open market. Malaysia, Canada, the United States, the EU, and so on. These are not profitable returns for the most part - this is them trying to get their money out of China before things go sour. The rank and file of China's elite know that the time is ticking on their cash.

Trade: Reliance to the extreme
What few statistics can tell you is the extent of China's overall reliance on international trade. By some measures, it is a quarter of their economy, by others, it is close to being half. This isn't good for the incoming world without free and open trade.

The demographic problem I listed above will already induce a major problem by destroying a massive amount of jobs. The trade problem will not just make these problems worse, it will also induce many things: famine, sickness, and so on. The simple reason for this is that China is only set to continue becoming a net exporter of almost everything - food, raw materials, and so on. The Rare Earth Monopoly it was supposed to have established so long ago never truly came to fruition and African/South American mines can provide for the various powers of the world.

Another flashpoint is the Belt & Road Initiative. At first glance it's an economic initiative to take over the world, like the American Marshall Plan (if you follow the propaganda I currently am vomiting over spouting). Except it's nothing close. The Marshall Plan had almost no riders except helping the Americans out with their Cold War. The BRI is explicitly designed to bankrupt and economically indebt nations. The Chinese have also started to factor in the incoming disorder and used that leverage to get a naval base in Sri Lanka... unfortunately, their naval disinclination will not stop just because of a base that sits along strategic trade routes it will need.

The BRI is also a total and utter diplomatic failure. In trying to outreach to Southeast Asia, the Chinese have instead given away money to countries which will not reciprocate economically. Malaysia accepted Chinese money for a high-speed rail right after electing a Prime Minister whose platform was mostly 'F#ck Najib, F#ck Jho Low, and F#ck China'. The Filipinos barely count as a unified country and the Chinese decided to dump money into building a new rail system there. For their part, the Filipinos are about to do the exact same thing as the Malaysians after Duterte is gone. Myanmar, Vietnam and others also lie on this list of Southeast Asian countries which have essentially successfully scammed the Chinese out of billions. The only part of the BRI that will continue to benefit China is that it has brought a large swathe of Central Asia into its support ring (although, admittedly, 'benefit' is a far more pourous term here).

Precarious is the new Chinese position. China's outer cities rely on these imported goods. China's inner cities rely on importing the same goods to elsewhere. This does not spell anything but disaster. And yet one more problem arises.

It is not the Americans; who have no interest in exploiting a large mess in China. It sits right across the North China Sea.

Its name is Japan.

Foreign Intervention - Japan, Korea and the Taiwanese Conundrum
Japan is about to go hardcore on China. The reason is simple. A single war in the Middle East - which with the Americans pulling out is sure to come - will utterly decimate their largest supply of oil. That's not good at all. A majority of Japanese oil comes from the Persian Gulf; and without it the country will suffer. Japan, with its economics stagnant, will suffer a protracted multi-year recession with the oil shortages.

But as I've already outlined: China will lose political and economic coherence. Providing the perfect opportunity for Japan's latent nationalism to go astray. It's unlikely that Japan will change much, even when at war with China. For Japan, struggling along as a perverted but decently-well-liked older brother in world politics is standard operation. A single oil shortage will not change its relations with the Americans and Southeast Asia - which it desperately needs to keep those shipments of food and oil coming - but instead it will fundamentally change its relationship with China from that of unfriendly rivals to Raider and Raided.

To put it bluntly, Japan will go after China.

On a strategic level, it makes perfect sense. The North Chinese Plain is deliriously amazing for food production, and Liaoning not only has a part of that but oil production facilities. Sakhalin will not be enough, as it only produces some amount of oil. Plus, the Chinese aren't historically the most amicable friends. And unlike what many think, Japan is more than ready to go to war with China - and more likely than not it will win.

Let's get started on the basics of such a war. The Japanese have something the Chinese don't: a blue-water navy - and strategic advantages. Most of the Japanese population sits outside of the range of Chinese aircraft, in the huge chunk of urban area that makes up three fifths of the entire country's people around Tokyo. The Japanese, on the other hand, have a little island less than hundred kilometres away from Taiwan that gives them ample opportunity to pop over to Wenzhou, bomb the living sh*t out of it, then run away. Yonaguni Airport would cover basically every city on Zhejiang and Fujian's coasts, as well as Taiwan.

Then we have the two countries - or as they will be in this war, battlegrounds. Taiwan and the Korean Peninsula. Taiwan is already a set Japanese ally. As Asia's only fully-functioning democracy, the Taiwanese will never in a hundred years willingly submit to Chinese rule, and they don't have to. Because they're an island.

In the Second World War Great Britain suffered a huge, massive bombing campaign by the Luftwaffe. London was bombed almost daily in a 100-day-long aerial battle. The general response of the British public to endless bombing was a resigned 'f#ck off, Germany!' Taiwan will be no different. The Taiwanese don't need to prepare a navy to fight China. A long stretch of anti-air defences and long-range cruise missiles will do the trick, as it will be a defensive war for them. And this is where the Chinese will suffer.

Crossing the strait between Taiwan and China is ridiculously difficult. The best possible way would be to land troops on Penghu County, the islands closest to the Taiwanese homeland from China, and then a proceeding invasion of Chiayi or Tainan. The problem lies with this. The only complete naval invasion that has ever occurred like this is one very notable D-Day, and it took two blue-water-navies, an empire and a quarter of the world's overall capital market, and it was still a total miracle. By this time, the Chinese will literally be imploding economically, still have no blue-water capabilities, and be up against the world's second (or third) strongest blue-water navy, practically isolated from Chinese aerial capabilities. This is a completely hopeless venture for China.

In a conceivable invasion of Taiwan (which in order to hamper Japanese capabilities it will need control of) the Chinese will find their ships sunk en masse by cruise missiles, their airstrikes countered by more airstrikes and professional fighter jets, and not to mention just a massive casualty count. When the Chinese ever consider the invasion of Taiwan necessary they will soon discover how meager their abilities are against a massive body of water.

Another part of the world which China would need control of to win would be the entire Korean Peninsula - not just North Korea, as that still leaves a majority of the Japanese population out of range. But it would be a risky venture. For one; the general experience of invading the region would be a miserable mess because of one thing: North Korea. Make no mistake: the North Koreans might sound like China's closest allies, but in matter of fact they no longer are. This is simply because Kim Jong-Un met Xi once, was talked down to like the leader of a province of China, and essentially decided 'we're not talking to these people ever again'. This is part of the motivation for the North Korean leader's push to get economic concessions from the United States (not that having a POTUS who is functionally deficient helped much) and nuclear weaponry.

From what we know, and to put it mildly, the North Korean leadership is quietly being culled bit by bit by Kim, who (understandably) does not trust a single one of the f#ckers around him. His grandfather 'died of natural causes' days before he was supposed to discuss the specifics of reunification, his father drove the country into economic ruin and then died of a myocardial infarction (for the layman, a heart attack) and now here he is. Jong-Un does not trust a single one of the idiots that came before him because quite frankly he's scared that one of them will kill him - which is why he's been so insistent on murdering family members that could potentially challenge his rule. It also leans into his obsession with nuclear weapons. Watching the Libyan crisis, he basically believes he now needs nuclear weapons to remain in power, but he also hoped that the Americans would be nice, get the hint of why he wanted them so badly and remove the economic sanctions. Two consecutive American presidents later, he has not gotten what he wanted. Obama pushed the moral (and frankly strategically intelligent) line with Kim, refusing to give him more than crickets, and Trump is too embroiled in self-praise and infinite paranoia of being impeached to be even partially logical with him.

This leads to Kim's new solution: Moon Jae-In. Moon, as President of South Korea, has been cordial and understanding that he can manipulate the situation to his personal advantage, and has slowly lured Kim into the possibility of a deal with tiny inches and repeated meetings. North Korea is simply not going to build intercontinental ballistic missiles which would hit the United States, because there is no intrinsic benefit to it to nuke an American city and risk full-scale retaliation. Instead, having six to seven nukes which can hit Beijing and Tokyo will ensure that no one wants to invade, and that no one will go to war with it - including China. Kim will scream bloody murder if the Chinese want to use his territory to cross into South Korea because he so desperately wants a deal with the South Koreans.

A lack of support on the Korean situation means that the Chinese suddenly have to engage in the exact same sort of invasion that they would have with Taiwan, only now compounded by the difficulty that three nations, not just two, are potential enemies - or attempt to steamroll the entire Korean peninsula at one go. And while just a few years ago, China could have ensured at the very least South Korean neutrality, a string of abuse against South Korean companies in China has soured the relationship to no end. The Koreans probably won't be allies with Japan, but they're set to become friends-of-circumstance against the Chinese.

In the coming war the Chinese are incessantly disadvantaged. The Japanese have every possible advantage they could need, and they're already preparing their blue-water navy to go back to its full glory; the Chinese are by all accounts completely unable to enter the coming naval conflicts and will suffer compounded economic hardship with Japanese ships running around the South China Sea blowing up Chinese cargo as they so wish. The Taiwanese and the Koreans will be no where near willing to join the side of the Chinese, and will become - at the very least - friends of circumstance with a nationalistic, rattling Japan.

The pry bar that removes China from the top powers list will come as soon as the first non-American Gulf conflicts arise. The Chinese will not enjoy a single moment of the coming war, because it's about to give them a good kick up the backside, and shake out quite a few bones and teeth in the process.

Summarising it all
To start with, what will begin is the Chinese economy completely breaking up. It will be - and is - rather slow in the eyes of those without intrinsic knowledge of the Chinese system. People will remain in awe of the 6-7% economic growth that it powers per year even as it slows. People will continue to boast about an incoming Chinese future. The Chinese abuses will continue unabated as they become increasingly worried in an increasingly volatile world. Chinese capital will flow elsewhere (mostly to the United States) as the Chinese elite begin to escape from capital retention operations disguised as 'corruption crackdowns'.

Then the breakdown will start to go from news articles to apparency. The Belt and Road Initiative will finally break without Chinese capital. Everything will begin to slow down. Lending will accelerate even further to the point that even experienced analysts will have a difficult time tracking off-sheet debt. And the abuses will escalate further. There will be even stronger police brutality. Violence against foreigners. Occupations in Hong Kong and eventually even more detention of the entire Uyghur population.

When a war in the Gulf starts all hell will break loose. In no particular order, the Chinese will attempt to enforce their claims in the South China Sea, hoping to circumvent the Japanese, which will likely coincide with any potential American pullback from Southeast Asia in general. It will mostly succeed due to a lack of local naval powers. They will begin harassment of Taiwanese craft and go even further with their harassment of the tiny nation. Feeling satisfied with what they've done and feeling arrogant as they will become, they will send military force to the Senkaku islands or whatever they want to beef with the Japanese and the Third Sino-Japanese War will begin.

Somehow or another the Chinese will force the Koreans and Taiwanese to join the Japanese in the fight, with various differing levels of willingness. No matter what, the Japanese will fund the Taiwanese and Koreans, with potential minor assistance from a U.S President or U.S forces. The Chinese will eventually fail in their wars and depending on what transpired, the Japanese may even invade China on their own, or force major concessions on the Chinese.

Sectarian violence will flare throughout all of China. The Foxconn serial suicides will look like a children's television show compared to the outbreaks of mass violence that will occur in rural cities dependent on imports to the wider world. People will starve in Chinese coastal cities. The Chinese military will transition to becoming a policing force, which it will probably be far more effective at than invading other countries. The Chinese economy will become very much like the Soviet one, with forced rationing and what not, and a potential Second Cultural Revolution might even come. And the Chinese currency will be treated as useless.

The collapse of China will thus advance. The exact timestamp for most of these events is unclear (I try to keep myself from doing anything too exact in these sorts of predictions) but within the next decades these are essentially ensured.