In this episode, we continue our series on China's economic and political systems, and how they plan to deal with population decline. We discuss China's "One Child" policy, and the impact it could have on the world's largest economy.
00:03:54.240And China was like, oh, this hasn't happened before.
00:03:57.860OK, well, we will restrict your access to vasectomies.
00:04:01.520We will restrict your access to abortions.
00:04:03.600And you're going to see what happened, you know, with the one child policy.
00:04:07.460If you look at like the year without a, what was it, a year?
00:04:10.560It was the summer without a birth or something like that.
00:04:13.160It was this region where they go, we're having a summer without a birth in this region because we're so good at following the Communist Party's orders.
00:04:19.140And what they really just did was forced abortions on everyone who got pregnant and like murdering people.
00:04:41.300There are so many ways that they could fix this if they really have to is the way that the CCP thinks.
00:04:48.720And they could even do, you know, birthing facilities.
00:04:51.540They could do all sorts of things that show sort of a top down thought process that we wouldn't even consider in the West.
00:04:58.660Now, before they get to this, they're going to have to go through the needle, which is complete economic collapse.
00:05:04.660The Chinese system, and we can do a different video on this, is so fucked, it's almost impossible to describe how fucked the Chinese system is.
00:05:14.340A lot of people are like, well, no, it's just their demographics.
00:05:19.960They get something like 83% of their energy needs inputted and like 86% of that are coming from the Middle East.
00:05:28.480That means that they're going around like all of these people who hate them, like India and through like the Strait of Malacca, which could easily be blockaded or like it's they are in an incredibly vulnerable international position.
00:05:42.880Worse than that, they don't even produce their own food.
00:05:45.720The food they do produce is they don't even produce their own phosphates for that food.
00:05:51.760So they wouldn't even have the same food production they have now if they were blockaded.
00:05:55.180Oh, and on top of that, and they don't even need to be blockaded.
00:05:58.880You just need to have the beginnings of a collapse of a globalist system, which we are already beginning to see, which is what happens in this future.
00:06:06.480On top of all that, they don't even have water.
00:06:09.540Like they have water in some parts of China and not other parts of China.
00:06:12.540There's a great video on it that I'm going to link to here on China's water situation.
00:06:17.520But something like 96% of their water is just unusable because it's so polluted.
00:06:22.400And this is a huge problem when their current energy needs, like their current energy production within the country is mostly coming from coal, which requires lots of water to make work.
00:06:33.700So and then they require water to grow their own crops, which they can't even grow.
00:06:37.200I almost forgot to mention their huge infrastructure problem.
00:06:41.240To learn more about this topic, I check out the video.
00:06:43.560China has a debt problem three times larger than Evergrande by Economics Explained.
00:06:47.360And then their whole housing situation, which, OK, I'm going to quickly touch on this because a lot of people don't know what's going on with the housing situation and why it's so much worse than individuals think it is.
00:06:57.360So something like 76% of all of China's wealth is in their housing market.
00:07:03.360Because that has been the most stable of all of the markets within the Chinese economy.
00:07:09.020You know, historically, companies have in the stock market has been really up and down because it can randomly be interfered with the state.
00:07:17.200The state cannot interfere with the housing market in a way which would cause it to collapse, or at least historically it couldn't.
00:07:23.600Because when the Tom and his party took power, what they did was they said, OK, we're nationalizing all property, all land in the country.
00:07:30.080And then what ended up happening is the Chinese, if you want to understand how the Chinese system is modeled, it's kind of like states, but they're called provinces like you would have in the U.S.
00:07:38.560But in the U.S., a lot of federal tax dollars go back down to states to help pay for things.
00:07:42.500That's not true in the Chinese system.
00:07:44.380In the Chinese system, the provinces really have to pay for everything local themselves, and the federal tax dollars go to big federal national projects.
00:07:51.820But so it turns out that these states are not good at collecting taxes.
00:07:56.780Anybody who knows historically, that's a sign of an empire that's about to collapse.
00:08:00.080So there's something like estimated they're only collecting like 3%, 3.5% of the taxes are supposed to be collapsing.
00:08:05.180This is really in line with like a non-functioning civilization.
00:08:09.340But anyway, so how do they make up for this?
00:08:11.720What they do is they rezone land that is on the outskirts of urban centers as urban land, which allows them to sell it because rural land is still owned by the people in China.
00:08:23.420And then they sell them through debt that's taken out that's not supposed to be taken out by these like secret holding codes.
00:08:29.980But essentially, they are supplementing not having tax income with land sales at the provincial level.
00:08:37.440And this can make up like 33% of like a province's like ongoing operating expenses, which means that if the real estate situation in China collapses, which it's going to and it is, also their ability to get government revenues also collapses.
00:08:53.300To an extent that is not easily replaceable with tax revenues.
00:08:59.760In addition to all of this, their like whole economic infrastructure, their whole reason for existing on the global stage was as a bit globalist multi-country supply chain.
00:09:10.780So they would do one part within a globalist multi-country supply chain.
00:09:13.720Well, with COVID, they showed that they would just like close their ports, close their factories.
00:09:18.440And you're increasingly seeing them do stuff like this, which means that they are no longer useful as a player in a multi-party supply chain.
00:09:25.900Because if you block just one step, even if you're like one of 100 steps, you've blocked the entire supply chain, which means that if you're doing anything in China and now needs to be lateralized in China now for minimal economic problems when they block supply chains.
00:09:39.820The problem is that China can't do any advanced technology. They just suck at it.
00:09:43.500Even Huawei's newest chip looks like it's probably based in Taiwan.
00:09:47.020They're pretending like they're making it locally.
00:09:48.700That's wild that like China can't even make chips for its own phones.
00:09:52.460Like the main thing it's doing, they just do not have this technological capability.
00:09:58.200So anyway, and as to why they don't have this technological, they had this huge project where like they were trying to do like simplistic things, like just make their own pencils that didn't suck.
00:10:06.160Like this was a huge project in China for a long time.
00:10:15.720To just find out how to make competent pencils.
00:10:18.400I meant ballpoint pens. Sorry about that.
00:10:20.720They actually really kind of suck at this.
00:10:23.560And worse than all of this is that if you're going to set up a new part of your supply chain, it's like always cheaper to do in Mexico now if you're a U.S. company because labor is less expensive in Mexico now.
00:11:05.000So you might say, well, why am I still kind of bullish on China?
00:11:09.500One, they can force population, which is going to be relevant for whatever comes after they pass through the eye of the needle, the collapse.
00:11:15.700But also they have set up their entire system.
00:11:18.600That's what the social credit system is.
00:11:20.100That's what the constant monitoring is.
00:11:21.940That's what the money that the government can track is.
00:11:23.840Why did they do these COVID protocols if it put them in such a dangerous position vis-a-vis their existing economy?
00:11:30.080Because it was all a plan for the collapse.
00:11:32.520You're saying they were preparing for collapse.
00:11:35.000Yes, they were preparing to maintain their existing government systems in a collapse.
00:11:56.340But at least a government that is capable of becoming competent again.
00:12:02.120A government that is capable of disseminating some of the hard policies that can culturally unify a geographic region, increase its fertility, and maintain some level of isolated technophilia.
00:12:14.020Yeah, but I don't really get that impression that that's the direction they're moving in.
00:12:18.080I see a lot of efforts to subdue the population and control the population and maintain, you know, for those who have power, maintain their position.
00:12:25.880That is all true, but that is going to be infinitely better than the religious extremism that is going to dominate the rest of the world.
00:12:33.280Right, but I don't see how that, I mean, unless they have some sort of elite, separate, highly educated, technophilic, suddenly innovative.
00:12:41.980Yeah, so this is also important to note.
00:12:43.360So a lot of people are like, yeah, but won't China, like, start genetic selection, genetic engineering?
00:12:47.460No, China is really resistant to all of these.
00:12:49.540People who ask this stuff and expect East Asian countries to engage with this technology do not understand fundamentally how conservative East Asian countries are.
00:12:57.960They are more conservative, like, at a small C level than probably anyone or any cultural group you have met.
00:13:07.640They are more conservative, for example, than ultra-Orthodox Jewish communities.
00:13:12.040They are more conservative than Amish communities in the ways that they engage with cultural technologies.
00:13:18.220They will, it seems very unlikely to me that they will engage with these technologies.
00:13:23.240They, if anything, will go back to something that looks more like the imperial exam systems.
00:13:27.720They will go back to a model that is based on old Chinese empires.
00:13:31.520But what is important and what I am, it's not great, but it's not going to look like what we are going to see across the West, which is small, stable, technophilic havens surrounded by religious extremists who hate them and want to kill them.
00:13:48.140China is just going to be like a large, economically depressed region that is finding a new, stable state for itself.
00:13:56.400And it will take a while to find that, as China always does.
00:13:59.820But as it begins to find something that works, it will begin to come back as a major and unified player.
00:14:06.560This has huge implications for all of the countries around it.
00:14:12.640One, we're going to talk about Taiwan, and we'll do another video on whether China would attack Taiwan or anything like that.
00:14:17.160But if Taiwan leaves the globalist economy, the globalist economy is kind of fucked.
00:14:22.440Because they are the only ones who can produce a lot of the chips that are used in, like, everything.
00:15:12.920To clarify, I'm not talking about existing capacity for advanced semiconductor manufacturing.
00:15:17.960I'm talking about having the human capital to build that.
00:15:21.140Or the investment capital and will to build out things like that.
00:15:25.660So, I mean, if the chips were shut off, which countries could conceivably begin producing them themselves after, you know, like a 10-year investment and boot-up period.
00:15:35.540And this is just really meaningful if you're thinking about the future of a deglobalized world and what partnerships matter.
00:15:43.500In the past, if you've ever played like a game of Civ and like a new resource unlocks like iron or uranium and you're like, I've got to make sure I have a good alliance with a country that has some within their borders.
00:15:55.300It's going to be the same way with people who can produce these advanced silicon chips, especially if Taiwan leaves the world stage.
00:16:37.520When I say good cults, I just mean that they are internally consistent.
00:16:40.520I expect the future of Korea, when we say what it's going to be, it will be a single cultural unit, which will make it very different from other countries around the world.
00:16:48.360But it will be run by a single, what we would today think of as a high fertility cult.
00:16:53.720Whether that cult is technophobic or technophilic is yet to be seen.
00:16:57.760If it is technophilic, it will be one of the largest players in world history.
00:17:01.900And so that could be really interesting.
00:17:05.500Like I visited what you could describe as like cult complexes in Japan.
00:17:12.260And they feel very different from mainstream Japanese culture and also a lot more prenatalist.
00:17:17.560They're not currently technophilic to my knowledge, but they totally could become technophilic.
00:17:22.040When you're familiar with like their cultural ethno groups in Japan that are based around the descendants of samurais that believe you need to have something like six sons or something like that.
00:17:32.120Yeah, and they still hold to these practices. And so they have really high fertility groups.
00:17:35.800I should clarify here that this is not the descendants of all of the samurais who are in this group.
00:17:39.720It is a small, small group in Japan that would best be called a cult by outsiders as all groups that culturally extremely differentiate from mainstream society are often called if they are considered youngish.
00:17:52.660Now, clearly, this group takes inspiration from what they define as their heritage.
00:17:58.560However, who's to say how many of them are actually from those samurai families?
00:18:02.520So what we might actually see by Japan, Weeb's fantasy, is it gets taken over by the descendants of the samurais.
00:18:10.980And they have, yeah, basically a martial, unified samurai empire of a country, which, again, makes it very different from a lot of the Western world.
00:18:20.580And so you can say, why are they able to do this?
00:18:23.300Why aren't they falling apart in the same way the Western world is falling apart?
00:18:26.620The core reason is that they are basically already city-states.
00:18:30.420Japan is a city-state and Korea is a city-state.
00:18:32.980A huge portion of each country's population and an increasing portion of each country's population is based around the metropolitan centers of each country.
00:18:42.260So is everything that they're building, which makes it easier to culturally consolidate, especially when everyone around them is so hostile to them.
00:18:52.440So that is the direction I think that those countries are going.
00:18:55.740If you look at, what's the word I'm looking for here, Indochina and Oceania, not including Australia or New Zealand, those are the two areas, like Indonesia and stuff like that.
00:19:06.940You know, Indonesia is going to be a really big player in the future.
00:19:09.880But how they're a big player isn't clear to me.
00:19:12.020They could be won by a technophobic population.
00:19:14.840Singapore, obviously, is really well set up for this haven state world that we're entering into, that we've described in other videos.
00:19:21.580I think they're going to be a very large player.
00:19:23.240And if Israel ends up getting taken over by technophobic populations, the number one contender to be the core linchpin in the network of havens is going to be Singapore, if they can get their act together pronatalist-wise, which I suspect they will be able to because the government there is sane.
00:19:42.660What I thought you were going to talk about is the, I think, you know, when it comes to, we've talked about corporations producing humans, like essentially corporations, either through, you know, surrogates that they hire to gestate their material, as it were, or through artificial wombs someday, just start creating humans and then using them like in a corporate way for, you know, producing things for having their own sort of state.
00:20:09.120I feel like if that is going to happen somewhere, I feel like if that is going to happen somewhere, it's more likely to happen somewhere in East Asia.
00:20:14.440I mean, I've always thought like China is on that list.
00:20:22.400But you've also got to keep in mind how conservative these countries are.
00:20:24.860Again, I say people expect them to be the ones that do the weird genetic stuff.
00:20:27.900This will happen in a somewhat post-collapse state, I think, where like just people stop enforcing things, the attention to this sort of goes down.
00:20:39.880And then at some point, some really entrepreneurial person is going to just go for it, ask for forgiveness, not permission, or not even that.
00:20:48.800Because at that point, if they're the ones with the humans, they may be the ones with the power.
00:21:08.980So a lot of people are like, yeah, but what about the rising individuals today?
00:21:11.520Like we're invested in some countries like Vietnam, for example.
00:21:13.880I think they have a really positive future in the near term.
00:21:17.540But one thing we have to remember about countries like Vietnam is, unfortunately, these countries that are doing well
00:21:23.520because they're developing countries today are doing well because of the globalist system we live in.
00:21:28.580The countries that are going to be hit hardest as the developing system begins to collapse are going to be the ones that are what we call developing countries today.
00:21:37.760Right, because you're getting free rent when it comes to the policed seas, like open shipping channels, and demand from other nations.
00:21:45.640Yeah, so this is why Latin America is going to be hit so hard.
00:21:49.100And one of the reasons why we just like don't even talk about like it does not matter economically in the future, because Latin America has really tied itself to China.
00:21:56.440And as China collapses, specifically southern Latin America, Mexico is going to be fine.
00:22:13.920They're exporting like raw materials, like metals and copper and stuff used in this building craze.
00:22:19.920And these buildings are empty, a lot of them.
00:22:22.840You know, they are trading like crypto.
00:22:24.940The reason why in China, an unfurnished building room trades for more than a furnished room is because it is like an unmolested like token.
00:22:38.100And the reason why, and I didn't really get to this, like why is it that the real estate always goes up?
00:22:44.320It's because everyone knows that when the real estate does begin to persistently grow down, that's when the state, as they understand it, collapses.
00:22:51.020And so if you can't take your money out of the country, and the stock market doesn't matter, well, if the money is going to crash anyway, because it will crash anyway if the real estate crashes, because the government will crash, which is doing all sorts of funny things with their currency, then you might as well put it in real estate.
00:23:09.480So anyway, anything else you wanted to talk about?
00:23:12.840No, but I hope East Asia does well, and I'd love to see things bounce back.
00:23:17.540I think the fun thing about them, and they're really like, this is the area to watch.
00:23:21.100This is like the geographic zone to watch because I think it's the most wildcardy one because it's seeing such a profound, at least like in China, Japan, South Korea, such a profound crash that like it's so hard to, like who knows what's going to happen?
00:23:37.980And I think that's really, it's both very dire, but also possibly exciting if you're like, well, I mean, you know, who knows?
00:23:43.980They're going to get really creative, possibly.
00:23:45.740Yeah, and it does make sense to keep alliances with most of these groups open, while also correctly ranking their importance.
00:23:56.880And I think one of the big problems with China today is people vastly overestimate its importance to the future of the world.
00:24:04.220I remember I mentioned this once on a call with, you know, one of these CCP Chinese, whatever people, the high level person, and they got all mad.
00:24:11.620They're like, China has risen many times, and this is, you see China has a long history, and it always rises.
00:24:19.940And I was like, whoa, whoa, whoa, whoa.
00:24:26.880And you are at the end of one of those cycles right now if you look at history.
00:24:30.420So, yeah, China's just not that relevant from a future perspective.
00:24:35.260Taiwan is super, duper, duper, duper, duper, duper, duper relevant, like much more relevant.
00:24:41.140Actually, one of the funny predictions I have for the future, people want a really funny prediction for the future, is I believe there is actually a good chance, if China doesn't successfully take Taiwan, that in 50 to 60 years, there could be a real possibility of Taiwan taking China.
00:25:00.700Just because they will be economically so much more productive than China, so much more important to the world stage.
00:25:06.620And China itself, there is a small chance, we've talked about all the systems they've put in place to allow the system to collapse while still maintaining centralized control.
00:25:14.740But if that centralized control falters, or you end up getting fights within the CCP, which ends up subdividing the country.
00:25:21.020As has happened before in Chinese history, everybody knows about the warring states period, or the three kingdoms, or the, you know.
00:25:26.760And this weakens them enough that Taiwan can come in and begin to take them one at a time, which could happen.
00:25:34.520That would be an interesting twist of fate.