The horizon is not so far as we can see, but as far as we can imagine

National Futures In The Age of China & Collapse

The baseline is that China is now the dominant economic power: the greatest great power. This is not evident to everyone yet, it will be soon. They produce more science, are ahead in most technological areas and have the largest industrial base. I’ve written about this plenty, so I’ll leave it at that.

The next baseline is that we have three onrushing issues: climate change, ecological collapse and running out of various resources. The third isn’t obvious to most people yet, but it will be. China has won the lead horse position on a style of life and economy which is genuinely unsustainable, in the sense that continuing to run our economies on planned obsolesence: building lots of stuff to just throw it out in a few years, cannot be sustained because it’s destroying the conditions which allow for human life and a predictable economy.

This doesn’t mean that taking lead horse isn’t useful to China: if they have sense they can use all that industrial capacity and scientific and engineering expertise to speed thru the necessary transition. So far they aren’t, beyond some steps towards the renewable electrical economy, which is necessary but insufficient.

To put it simply, civilization collapse is on the way. Everyone is going to be hit by it, even China and America. I’d expect China to hold on longer than most, unless there’s an early inundation of their croplands in the North, but by 2070 to 80 at the latest, China will be in warlordism again.

However, let’s run thru some shorter term notes about various nations.

Europe is in terminal decline. Maybe a few parts will avoid this, but they are no longer leaders in new science and engineering (China, the US, Japan and South Korea are all ahead of them) and are losing their industrial base because of their high input costs, primarily energy. Making Russia their enemy is costing them their legacy heavy industry, since American energy costs much more than Russian.

Of the major European countries, the UK is in fastest decline, since they sold all their industry long ago and decided to try and live off finance but the entire subcontinent is moving back to its usual place in Eureasian affairs: a backwater.

India isn’t going to make it. Sorry, too many internal problems, too little time. To much corruption and the authoritarianism is clumsy and stupid (there is smart authoritarianism, India is not practicing it) and climate change is going to hit India fairly hard and early. But overall, the signs of takeoff aren’t there, and there isn’t enough time. India will be broken up by 2050 to 2060 and 2035 to 40 is entirely possible: when they have real crop failure, they will have famines which kill hundreds of millions and cause vast violence and displacements. And they are going to have vast crop failure.

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South Korea and Japan are the American allies which actually matter. Everyone else is meaningless. These two countries still have industrial bases and fast scientific and engineering advancement. In per capita terms South Korea is first in the world, Japan is second. For now they’re fairly firmly on the US side, but if China is smart and willing to cut them a good deal and they’re smart, they make their peace with the other side. The sooner they do this, the better deal they’ll get.

Russia was done a vast favor by western sanctions, which have forced its oligarchs to actually spend money at home and which has allowed Putin to create new oligarchs based on seized western assets. No more wasting money on British football teams. The Russians are working hard on civilian aviation, they’ve vastly increased their military industrial output and in general sanctions have forced them into industrial policy. Their risk is being swamped by China, and they will have to be smart and cut deals where China lets them keep and extend certain industries.

Saudi Arabia and the oilarchies are screwed. They’ll have their little days in the sun, but they have no real industry or research and aren’t going to be able to ramp up enough. As the age of oil ends, and it is, they will fall into well-earned obscurity and meaninglessness. The only one which stands a chance is Iran, since sanctions forced it to create its own industries. As with Russia and pretty much everyone else, they’ll have to cut a deal with China to keep and extend that industry, but as early allies, that’s easily doable if neither they nor the Chinese get too stupid.

The Developing Nations have a window in which to cut good deals with China. I wrote an entire article on how to cut good deals with China, so I’ll leave it at that. If they don’t, well, the new order will still be more friendly than the late neoliberal order, but most such nations are not in a position to handle climate change and ecological collapse well. It’s going to be ugly. That said, for a few, there will be an opportunity to come out the other side comparatively much better off.

Overall we are moving into a period like that from 1914 to 45 or any other major power reset: the old power is falling, the new power has risen. America was actually ahead of Britain by 1890, and it took quite a while for the British to fall, but this isn’t an exact analogy, because in this case the old and new powers are in conflict and there is an onrushing global near-apocalypse.

There’s only so much time left before everything starts falling apart in ways which can’t be ignored. Smart nations and smart people will use that time to prepare.



Week-end Wrap – Political Economy – December 17, 2023


The Secret Determinant of Your Survival in Catastrophes


  1. Dan

    Thanks. Makes entirely too much sense to ignore.

  2. There is a general trend that the “last shall be first, and the first last”. The first countries to industrialize were Europe, then America, then Japan, then South Korea and now China.
    Industrializing and being in a powerful country causes a false sense of superiority and pollution.
    “Hey, let’s cut off the source of our cheap raw materials by waging war. What could go wrong since we’re so powerful and awesome?” –Europe with an ego bloated from their past power and industrialization.
    In America pollution is so prevalent that nearly 10% of male children have autism, and over half of children have a chronic illness.

  3. StewartM

    Output like this is why I think your writings are much-needed. Elsewhere I got “Russia is flailing!” in Ukraine news and “China is imploding!” for economic news. Yet the ‘flailing’ and ‘failing’ keeps chugging onwards.

    BTW, on LinkedIn, the EU’s sanctions against Russia , driving up European energy costs are used by the fossil fuel industry shills there as reasons why green energy is bad. WTF? They also hammer China for building “600+ coal plants” when 1) only 10 % are coal , 2) most of them aren’t in China proper, but abroad, and 3) for China, the traditional energy plants are viewed as temporary crutches to get them over completely to green energy by mid-century. The Chinese, unlike they, realize that flooding their cities and the North China breadbasket isn’t good for China.

  4. Purple Library Guy

    Side point about the Middle East: As the oil countries fall, oddly so will Israel. Once oil is not important strategically, nobody will care any more if Israel lives or dies. The declining US won’t bother to subsidize them to the tune of billions a year if there’s no oil beat to have a cop on. Everyone in the neighborhood will still hate Israel, but the US won’t be forcing them to make nice. They probably won’t have the power to make (conventional) war on Israel, but as China extends transportation networks through the region, Israel won’t be a major node if China wants to keep everyone else happy.

    In general, becoming less important will make the current oil states far less wealthy–but the actual lives of the actual people may well improve. As imperialist countries lose interest in the region, violence will reduce, and China will be all through the area saying “Hey, how would you like to be stable trading partners for ordinary stuff instead of sites for oil wars?” The ultra-rich will lose out, but some amount of middle class could come into existence.

    One hopeful note: As fossil fuels decline in importance, the strength of hard right politics may well falter, since big oil totally bankrolls that shit.

  5. Cesar

    Ian, have you read the new recalibration of limits to growth published in November? It seems like some people have argued against the updated data and methods used, but it would be wonderful to read your thoughts on this.

    Also, what would you (and anyone who’s willing to give their opinion) say are the best degrees for helping one’s current community at the same type that gives them desirable skills in the event of ever having to flee for another country?
    I ask this because as the citizen of a country that will be massively afflicted by climate change and overshoot, I would like to be able to give such advice to my fellow citizens who I know will likely become refugees in the years and decades to come. I know a medical degree is the best bet, but in here the monthly fees might be as expensive as 14 times the minimum wage, so it’s not viable to most people.

  6. Purple Library Guys

    @Cesar: Electrician capable of installing and maintaining solar panels and the paraphernalia surrounding them could come in handy. I remember hearing someone saying about Yemen when the war was, hm, at the height of being noticed . . . “The only people who can make money around here are mule dealers and solar panel salesmen.”

  7. Siew Wong

    As always, your articles often make great sense, logic and impartiality versus the fake and propagandist news ubiquitous on social media, MSM and online. Your assessment of the regional and national outlooks above sounds logical and spot on. I no longer trust the MSM media as irresponsible governments are hijacking it to advance their hidden malicious agenda. I routinely look forward to receiving your email with genuine news.

  8. Some Guy

    Agree with the overall gist of what you are saying, in particular that China is already stronger than the US. Economists get fooled I think by focussing on GDP (eg. they say ‘Russia and Italy have the same GDP, so we can crush Russia in a war’) instead of thinking about the capacity of an economy to produce physical objects as needed. Producing high end fashions or top notch video games (and in particular money laundering for the global elite) can generate the same GDP or more than producing oil or aluminum, but when it comes time to manufacturing weapons, some of these things are more important than others.

    One factor you haven’t mentioned that could be important over, say, a 25-50 year timeline is demographics.

    I don’t think most people have really come to grips with the relentless fall in birth rates (and sperm counts) and rise of urbanization throughout the world.

    Let’s look at the most extreme case, South Korea. The current population is 52 million. But there were only 250k babies born last year and the fertility rate continues to fall. With a fertility rate of 0.84 in 2022, that implies each generation is less than half the size of the last. The rate is projected at 0.72 for 2023, which means each generation is about 1/3 the size of the last one.

    On the one hand, the fall in population will be a blessing. Fewer resources needing to be diverted to new roads, new schools, etc. and just a general decline in the demands on the planet.

    But on the other hand, will Korea be able to accomplish much of anything (defending the West against China, developing new tech, etc.) when they are devoting most of their resources to sustaining an incredibly top-heavy population pyramid?

    And the same is true almost everywhere, just to a lesser extent.

    There are some mitigating factors. For one, as low fertility sub-populations (eg. urban hipsters) die out, more fertile sub-populations (eg. Amish) make up a higher portion of the population and that can slow the decline. This is probably less helpful in more homogeneous places like Korea.

    Immigration can be another mitigating factor, but immigrants are often scapegoats when the economy is not good, so it is unclear how stable immigration is, looking forward (just today France tightened their immigration rules, for instance).

    Anyway, none of this is to disagree with what you wrote, just that I think the transition from rapidly growing world population to falling population and the numerical dominance of old people (pending Covid and future epidemics) is going to change a lot of things in hard to predict ways as we move forward.

  9. Jorge

    The logic of Global Baking dictates China will want to annex Eastern Siberia, and that the US will want to annex Canada. This assumes that either can hold it together as complete countries.

    In general, railroads are the cheapest transportation infrastructure, and will be reborn. If I ran a family office (investment shop for generational wealth) I would buy railbeds and fix them up.

  10. Ian Welsh


    the advanced workman skills will all be useful. Knowing how to make basic medicines will be useful as well (sulfa drugs and basic antibiotics aren’t hard to make, it’s just illegal right now.) By workman I mean electricity, plumbing, etc… Knowing how to set up systems to catch and clean rainwater, etc…

    In other terms, think of the following: water, food, heat/cold, medicine and security. The best security is strong social ties and secrecy. I wrote an article about how to survive a few years ago, I’ll re-post it soon but you can read it now if you want:

    Some Guy,

    yeah, I was thinking I should have talked about demographics when speaking of South Korea and Japan (and even China). The absolute number isn’t all that important, but the ratio of youngs to olds is. I’m still wrapping my head around these things: on the one hand we need to have less people, otoh, it is going to cause problems.

    There will be mass migrations from places that get hit hardest to those which do better, but few countries are going to want to lose their national identity to mass immigration and that’s especially true of places like Japan and S. Korea.

    OTOOH, maybe it’ll finally convince us to clean up all the pollution in our environment, food and water. Also I’m not sure how much of the fertility drop is sperm/testosterone and female equivalents and how much is social. In high income nations people just choose to have less kids and if they’re also very unequal (like S. Korea) it’s even worse.

    We may eventually also get serious with proper child supports and inequality, because every survey I know finds that a lot of people who want to have kids don’t because they can’t afford them.

  11. Ian Welsh


    since the 1990 I have been saying that Canada needs a deterrent, against the US. My fellow Canadians don’t want to hear it.

    China wants Siberia, but nukes plus they can probably get what they want from Russia w/o war. The question is if it becomes too much of a negative sum game.

  12. StewartM


    We may eventually also get serious with proper child supports and inequality, because every survey I know finds that a lot of people who want to have kids don’t because they can’t afford them.

    However, doing this runs smack into Rand’s creed of selfishness, which has corrupted the US body politic. The Biden child tax credit, which more than halved child poverty, ended in part because the public did not care for it:

    Why? Well, this screams loud and clear: “Hey if *I personally* don’t benefit from a program, then it should go!!”. This is the result of telling people for nearly five decades “there is no ‘society'”, there is no common good, and things must benefit you directly and personally or they are of no benefit.

  13. Jorge

    Ian- to deter US expansionism, I recommend 1) more socialism and 2) striking first. In the provinces bordering on the Midwest and non-coastal Northeast states, beef up your long-term hard-to-rescind social spending and start soft-selling the advantages of leaving the US and joining up with Canada.

    The Arctic Circle is the next frontier for natural resource exploitation. No society has figured out that if your nationals work on everyone’s Arctic ships and everyone’s Arctic oil rigs, you know what everyone is doing. The nation that hosts the University of the Far North will dominate the Far North. The college-starting spirit has left the Western countries, and Russia has been too busy building up its core. China has the money and the cultural sensibility to do this, but doesn’t have any Arctic real estate.

    As to living in a partly collapsed society: until TV, everyone was bored out of their minds. People understand their reliance on cheap energy, but they do not understand their reliance on cheap entertainment. Learning how to run a distillery covers medical uses (wound sterilization, water safety) AND cheap entertainment. Until the US invented bank insurance, the only safe places for a farmer to invest money were timberland (it grows without attention) and aging hooch in barrels. Read up on the “Whiskey Rebellion” for a taste of how important this “financial technology” was to farmers.

    Separately, there have been sites that ran on water stills. My dad worked in a mining town in southern Chile, around 5k feet elevation, in the driest desert in the world (the Atacama). From the late 1800s until the 1930s, that town and factory ran entirely on glass solar stills. Diesel got cheap enough to truck all water in by the 30’s, and that’s how it worked in the 1950s during my dad’s time. The place might have a pipeline built by now.

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