Doug Casey on the Rise of China… And What it Means for the World

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by Doug Casey, International Man:

“The size of China’s displacement of the world balance is such that the world must find a new balance.

It is not possible to pretend that this is just another big player. This is the biggest player in the history of the world.”

What is your take?

Doug Casey: China has united 1.4 billion people into a single political entity, so of course they have a lot of weight. But simply having masses of people under your political control doesn’t mean as much as it used to.

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China would still be a poverty-stricken non-entity if it hadn’t been for the reforms that Deng Xiaoping made starting in 1980. Masses of uneducated, desperately poor peasants are more of a liability than an asset in the modern world. Deng transformed China’s economy into something that functions pretty much like those in the West. But now, Xi Jinping seems to be returning to the philosophy of Chairman Mao, with much more centralized control. That’s very negative for the country.

Secondly, China’s demographics are horrible. The average woman today only has 1.4 children. Low reproduction rates are to be expected when a society urbanizes. But China also had a draconian one-child policy starting in 1980 that only ended in 2015. That, and the fact the Chinese prefer males for cultural reasons, compounded the phenomenon.

Few people in the West realize that as a result of these things, the Chinese population is in steep decline. UN projections—which aren’t worth much but are still interesting—find that by the end of this century, their population could collapse to 600 or 700 million. And they’ll mostly be old people, so it’s not going to bounce back quickly.

I have real questions about whether China’s economic miracle of the last 40 years will continue. Perhaps it will even go into reverse. That’s because China’s huge transformation is the result of its adoption of some aspects of Western Civilization, which made the United States and Western Europe different from, and better than, any other countries in world history.

I think there are at least 12 characteristics that are underpinned the West. They are free thought, free speech, free markets, property rights, limited government, individualism, rationality, personal liberty, the concept of progress, privacy, the rule of law, and entrepreneurialism.

Humans everywhere understand their value and adhere to them sporadically, of course; without them civilization is impossible. But only the West made them integral to itself, as principles. They’re what made us unique.

There’s a great deal more I’d like to say about this. I’ve given several speeches on it, and how Western Civilization itself is being washed away, but I have never written an article about it. I’ll do so soon.

International Man: Since 2013, China has been working on its Belt and Road Initiative, which stretches from East Asia to Europe. It’s primarily a trade network of seaports and railroads controlled by Beijing, reminiscent of the ancient Silk Road. So far, over 100 countries have signed on to the massive trade and infrastructure initiative.

What are its geopolitical and economic implications?

Doug Casey: In the short run, it’s resulted in a lot of profits for Chinese corporations and employment for the Chinese workers who are building these things. Locals are hired mostly for coolie labor—which I find amusing and ironic.

Everyone in the West seems to think the Chinese are going to take over the world. While I acknowledge China’s hyperbolic rise over the last 40 years, I question whether the Belt and Road won’t be a huge overreach. It could backfire for several reasons.

Number one, the benefits of the Belt and Road initiative are primarily political. It’s planned and run on the basis of politics, much more than economics. It’s basically a government boondoggle—about the biggest in history. Building infrastructure in unstable third-world countries is generally a sucker bet for lots of reasons; it’s likely to be shockingly unprofitable. It may lead to the bankruptcy of a lot of Chinese banks and corporations that are involved with it.

Number two, a lot of countries are starting to see it as Chinese neocolonialism. I think the natives are going to find the Chinese much more unpleasant colonial masters than the Europeans. Among other things, massive numbers of Chinese people are immigrating to Africa. It’s a guaranteed formula for conflict.

I suspect it’s going to end badly for the Chinese politically and economically, especially in Africa, which produces nothing but raw materials and poor people. When Europeans and Americans stop shipping billions in capital, technology, and food to the Dark Continent, the progress it’s made will go into reverse because its political and cultural mores are hopeless. That’s why the infrastructure in most places south of the Sahara—railroads, roads, waterways, utilities, you name it—have collapsed in the years since the Europeans left despite trillions in aid and investment. You can see it happening now in South Africa, which is by far the most advanced country on the continent. The Chinese will be even less successful than the Europeans.

The local political nomenklatura profited mightily from bribes and corruption in the early stages of Belt and Road projects. Once they’re thrown out of office one way or another, retiring to mansions in France or Switzerland, the new governments will be unhappy with table scraps and one-sided Chinese ownership. They’ll try to teach the Chinese a lesson, and the Chinese will have to teach them a counter-lesson.

The Chinese could end up getting involved in lots of brushfire wars as a result. I expect you’ll see the Red Army acting the way the US Marines did in Central America and the Caribbean. Of course, the US will pointlessly stick its nose into the mix, increasing the odds of a global conflagration.

International Man: Since the end of World War II, the US has been the dominant power in the world.

Will the US hegemony in the world continue?

Doug Casey: The answer is no.

Perhaps the biggest reason is that there’s been a radical change, a degradation, of American culture. The US is not the country it once was. It’s become a multicultural domestic empire, which is intrinsically unstable and dysfunctional. The US has been transformed from a beacon of freedom into a highly taxed and regulated political dumpster fire. I hesitate to say it’s a police state—yet. But it’s moving in that direction.

In other words, the things that made the US different and great are vanishing. The twelve things I listed earlier are vanishing. At this point, it’s little better than any of the 200 other nation-states that cover the face of the globe like a skin disease.

About the only thing that the US government has that still more or less works is its military. But the US military is in steep decline. And nobody likes or even respects a country that bases much of its power on the military.

We’re generating hate all over the world. It used to be that everybody loved America. With troops and active “intelligence” operations in perhaps 100 countries around the world, that’s changed. The world has come to dislike and disrespect the US government. Americans seem to think it’s still Paris after D-Day. Far from it.

Meanwhile, the US government itself is facing bankruptcy, as are many of its citizens. The situation has been papered over, so to speak, by printing trillions of dollars—especially in the last couple of decades. The international acceptance of the US dollar has been critically important for US economic domination. Exporting over a trillion of them a year in exchange for real wealth has artificially raised the national standard of living a huge amount.

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