Tag Archives: business

A Pagoda Divided Against Itself

With China’s massively booming economy, the nation now rivals Russia for the title of largest regional power in Asia (with Russia’s sphere of influence primarily in the north and China’s primarily in the southeast). International trade with China is at an all-time high, and many American businesses are conducting even more of their operations in China. But will this new found power last? The answer is pretty simple. Let’s take a look at Chinese history; the patterns of governmental succession are frequent and consistent. From there, it should be easy to make a prediction about China’s future.

You’ve almost certainly heard the famous quote, “those who do not remember the past are damned to repeat it.” It might be hard to believe given how the world has evolved so much, especially over the course of the 20th century, but no people’s history confirms the validity of the quote quite China’s. In early Chinese history, rulers seized and maintained power through the “Mandate of Heaven.” The people believed that the gods placed their ruler on the throne, and when things like natural disasters or famines happened, it was a sign that the gods disapproved of the ruler, who would then be overthrown. After the people stopped believing in the Mandate of Heaven, the cycle continued, as inefficient rulers were deposed when the peasants were unsatisfied with their leadership. The longest Dynasty lasted 571 years, and the shortest lasted a mere 15. Though China no longer submits to dynastic leadership, this 4,000+ year old cycle continues today.

In 1949, during a period of civil war, the Chinese Communist Party finally overthrew the previous government and established The People’s Republic of China. However, today’s Chinese government is communist in name only. China operates on a market economy, and economically speaking is the most capitalist country in the world. The government only retains the title of Communist to appease the people who fought so hard to install a communist government and so they can exercise authoritarian methods of management and control when necessary. This information will be more relevant after we examine history in relation to the Chinese economy.

What caused this economic boom in China? The answer is simple: the largest population boom in history. While China has always been an extremely populous nation, and the first to have what would be considered “modern” cities, China has sparked an unprecedented increase in population. This massive increase in the workforce has given the Chinese economy access to incredibly cheap labor to be exploited. It is this labor which fuels production and powers the Chinese economy. The fact that the economy is doing so well is what is keeping the majority of people happy and tolerant of their government. There is a serious problem with this reliance on the population trend though. The Chinese economy is absolutely dependent on this population boom to continue indefinitely, and the government has no contingency plan. Here’s the thing: no nation in history has been able to keep up such a massive population boom for as long as China has, especially not one that large. Eventually, birth rates will have to drop, as keeping up a population boom this large is virtually impossible. And when the birth rates drop, even a little bit, the Chinese economy will hit a severe depression.

While the people in China’s major cities share a strong capitalistic mentality, the majority of China’s population lives in the countryside. These rural peoples were the communists who served in the revolution, and are only too aware that their government is not adhering to the communist ideals they fought for. For now, China has a strong central government which is able to keep the population in check, but that government’s strength is directly tied to the economy; once the economy weakens, the government will be vulnerable to usurpation.

So now that we’ve discussed the past and present, let’s predict the future of China based on the nation’s history, and the history and statistics of international population growth trends. I conjecture that China will continue to be an economic and political powerhouse, at least for a little while longer. But once the birth rates drop, which they inevitably must, the economy will face a cataclysmic recession. This economic disparity will cripple the government’s ability to maintain control, and will only further aggravate the nation’s peasants whose communist mentality is still strong. That communist mentality that drove the common people to fight in 1927 will once again spark rebellion throughout the backwater provinces of China. The Chinese will again engage in a long period of civil war, which (to an extent) will disrupt the international economy. During the war, China will fragment into two separate states: one which supports the government, and one that supports the rebellion. When the smoke clears, the government will be toppled, and a new government will be installed by the rebels that resembles their communist ideals. I predict that this aforementioned “Second Chinese Civil War” will have started before the year 2050. Given the American geopolitical strategy of destabilization, the United States may very well fashion an excuse to get involved, in order to end China’s rival political influence (read: threat) and ensure that American economic interests are protected. It would not at all surprise me if America were to “temporarily” take control of the Chinese centers of production, and maintain a strong military (and even stronger economic) presence in China’s largest cities after the civil war had ended.

Perhaps if the Chinese focused more of their educational programs on history and geopolitics instead of business and traditional Confucian ideals (which includes loyalty to the government and matters of honor), they would not have such a fragile state, and would be able to disrupt their pattern of constant political instability. My ideas are, of course, speculation, but I’d love to know what you think. Leave a comment and let’s discuss!

-Alex

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