chinese miracles

I think it is time to go on record with another prediction. This is not a prediction like the ones fortune tellers give you. It is not vague and universally applicable like "good things will happen to you next year." But it also does not predict specific details. That would be impossible in any case. The future is by definition unpredictable. What we can do however, is extrapolate from current trends and see where that leads us. And currently we are on a collision course with China.

I can see three possible outcomes with respect to China -and to some extent India - if current trends persist. An example of a change in trends would be if China somehow decided to stop growing. Another change would be if we somehow started consuming less. Both are unlikely to the point of being ridiculous. Current trends means we are both persisting in what we are doing. The West continues to consume at its wasteful rate and China and India continue to move in the direction of matching us in wasteful consumption.

The first outcome, and maybe the best one for us -that means the West- is if China were to somehow implode. If it were to choke on its growth to the point where it had to stop. That will not happen voluntarily and it may not happen without a fight, but under this scenario the fight would be largely internal and have only a minor effect on the rest of the world. I spoke to some friends who go to China often and do business there and they think this could happen. But it is hard to say how likely it is. One key reason is because we do not have good data on China. Nor do the Chinese for that matter, except maybe some of the leadership, but even that is doubtful. It is a closed society and that means a lot is unknown.

The other two outcomes are much less appetizing. Both for us and for them. The second scenario would be war. It too is something that many consider likely. War could come as a series of regional conflicts and it may even resemble the cold war we had with Russia. It maybe fought in Africa, the Middle East or even SouthEast Asia. It may involve little direct or overt confrontation.

Or, it could be an all out world war scenario. At this time China is not ready for this type of all out war, but over time its readiness may improve. There is also little rationale for a war at this time. There is still a ways to go before resource limitations become critical. However, if war is the outcome, the sooner it starts the better. If tensions are allowed to mount to the point where an all out war is the only option, outcomes will be very poor. An all out scenario is very unlikely in any case, but one never knows.

The third outcome is a more global type of collapse or implosion. I like to envision it as a new middle ages. A generalized and profound drop in the standard of living for nearly everyone on the planet. This could also be the Club of Rome scenario, although the Club reports predicted conflicts and wars. But an implosion without conflicts or regional wars is almost impossible. So what distinguishes the "global collapse" scenario from the "war scenario" is that there is no overall winner in the former whereas the latter does imply someone would come out ahead -either us or them.

My intuition is that a new middle ages scenario is the most likely outcome. There are several internal weaknesses that could cause a collapse in our fortunes. And if we collapse, the rest of the world is likely to follow.

As for timing, that is much harder to predict, but I suspect events will start unfolding sooner than anyone realizes. The world will be a different place by the middle of this century for sure.