August 4, 2023

China: Is the End Coming Soon?

 

China has been the major thorn in American manufacturing for some time.  Now a well-known expert says this is coming to a dramatic end in the next 10 years.

Proficient Sourcing has a network of domestic manufacturers eager for reshoring interest or just a desire for better suppliers.  Maybe at last we have some “good” news concerning manufacturing and China!

Peter Zeihan has been writing about world geopolitics for decades and recently released a terrific book– The End of the World is Just the Beginning.  If you want a detailed and fascinating prediction of upcoming world economics and politics, check it out.  There are also extensive comments on the availability of key minerals, such as steel, cobalt, copper, and numerous others.

In any case, Mr. Zeihan forecasts the end of China as we know it within the next 10 years, and the details of that forecast can be found in the above book.  He also claims these 5 beliefs about China are completely wrong:

  1. China is a technological leader.
  2. China is on track to become the largest economy in the world.
  3. China is a massive manufacturing superpower that doesn’t need help from anyone.
  4. China has a military, especially a navy, that could take on and defeat the United States.
  5. China is on the verge of having the global currency.

He produces a nearly daily email, “Zeihan on Geopolitics”, and the 7/26 edition reports on China’s youth unemployment:

“Today’s new factoid is that youth unemployment in China is higher than in Italy (in percentage terms).

For context, Italy had the worst economic profile in Europe and has averaged negative economic growth for decades. If China’s unemployment resembles Italy’s, it is a very, very bad sign. Let’s break this down in the context of manufacturing.

Phase 1. Everyone is reshoring and pulling investments from China. Young people are pursuing IT jobs instead of manufacturing jobs. The problem is that China is a closed system that sucks at all things tech.

Phase 2. Xi’s cult of personality has ensured that China’s labor force won’t be able to develop into a value-add or tech-based system. Meaning everything will get significantly worse, and there’s not much hope of it getting better.

Phase 3. Remember the last time something like this happened in the Chinese system? We ended up with the Tiananmen Square protests. While that triggered the change in the political system we see today, Xi’s wiped away any opportunity for such change to happen now.

When a disconnect like this happens in the employment system, it inevitably translates over to the economic system. I’m not suggesting that this is the end, but this is how ends begin…”

We mention Mr. Zeihan because if he’s correct, our manufacturing world will be completely changing over the next few years, and the opportunities for US manufacturing will be enormous.

Let’s enjoy some good news!

If you are concerned about your China connections and would like domestic supplier connections for manufacturing, we are ready to offer immediate candidates.  Text or call 513-489-5252 will get fast action!

About the author 

Charlie Harte

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