In Palm Beach lecture, geopolitical expert says Chinese economic collapse possible

While many political pundits worry over China’s rise on the global stage, geopolitical expert and author Peter Zeihan fears China for different reason — its possible collapse in the near future.

“We don’t need to stare at China’s rise,” Zeihan said. “We need to start thinking, though, about what China’s collapse means, because we failed to do that with the Soviets in the '80s and we are still cleaning up that mess.”

Speaking March 19 at the Society of the Four Arts in Palm Beach, where he appeared as part of the Esther B. O’Keeffe Speakers series, Zeihan highlighted three key variables he said he believes will lead to China’s downfall.

Firstly, he noted China’s demographic crisis, specifically, the country’s declining birth rate coupled with the nation's aging workforce.

“They’re now reporting that their birth rate has fallen by more in the last five years than what happened to the Jews of Europe during the Holocaust,” said the geopolitics expert, who was making his fourth appearance as part of the speaker series. “It’s the fastest collapsing demography ever recorded.”

The demographic data appears more dire with every update, he added.

“We are now in a situation where not only will the People's Republic of China cease to exist as an industrialized, modern nation state within a decade, but this is the last century that the Han ethnicity will exist at all,” he said.

Secondly, Zeihan highlighted China’s debt crisis.

Spurred by years of lax banking policy and the nation's minimally regulated real estate market, the country’s public and major private borrowers are estimated to have created a debt reaching tens of trillions of dollars, he said.

“They have overbuilt to the point that there’s somewhere between 1.5 and 3 billion housing units that have never been lived in,” Zeihan said. “That’s more spare housing units than the combined total of the rest of the world times five.”

However, experts agree that China may be able to avoid an economic collapse so long as it begins to heavily shift its economic policy.

Though Zeihan noted this possibility, he doubted its implementation due to his final variable, Chinese President Xi Jinping’s curation of the country’s government officials, academics and business leaders.

“He doesn’t want to be surrounded by yes men. He wants to be surrounded by silence, and he’s done it,” Zeihan said. “No one will bring him any information, good or bad, because they don’t know how he’ll react.”

As an example, he pointed to the Chinese spy balloon that flew over the U.S in early 2023. According to U.S State Department officials, Xi may have been entirely unaware of the mission.

“This sort of bad decision-making, this sort of incapacity to transmit basic information, suggests that this (China’s collapse) is going to happen a lot faster than 10 years,” Zeihan said.

He said the most worrying aspect of China’s collapse would be the effect on cheap consumer goods. However, he noted that the price hikes could be dampened through increasing investment in the United States' growing domestic industrial development.

Zeihan also spoke about the war in Ukraine, which he said he believes will now be decided by Ukraine’s ability to target key Russian oil and mineral plants on Russian soil or Russia's increasingly powerful military armaments.

Ukraine intelligence claims it has already struck a dozen energy facilities, according to a CNBC report.

However, he also noted that Russia’s destructive military capabilities cannot be underestimated, citing Russia’s recent victory in the battle of Avdiivka.

Zeihan said he considers Russia to be a greater existential threat compared with China because of President Vladimir Putin’s desire to expand the nation’s sphere of influence well into Europe.

“If there’s anything we understand about the Russians, it’s that this isn’t the first war and it's not going to be the last war,” he said. “This is the ninth time Russians have used military force in an attempt to expand their perimeter, and the next wave will involve NATO countries.”

Speaking about the upcoming U.S. presidential election, he said it will most likely be decided by blue collar union voters' choices between President Joe Biden or former President Donald Trump over their immigration policy.

While the current Republican voting bloc without the union vote is “solid” and “cohesive,” Zeihan said, “it’s not enough to win an election.”

Diego Diaz Lasa is a journalist at the Palm Beach Daily News, part of the USA TODAY Florida Network. You can reach him at dlasa@pbdailynews.com. Help support our journalism. Subscribe today.

This article originally appeared on Palm Beach Daily News: In Palm Beach talk, geopolitical expert says China's collapse likely