Have you heard of Peter “Zion” or “Zeihan”? He’s allegedly a geopolitical strategist and a best-selling author. His speeches and interviews – especially on China -- garner millions of views on social media. And suddenly everybody on Twitter and Facebook is repeating Zeihan’s talking points like a robot. He has single-handedly created a mass psychosis!
No doubt that there is a huge cottage industry that profits from the ”China collapse” narrative, but Peter Zeihan is the unrivaled leader now.
Peter’s predictions can be summarized thus: total gloom and doom scenario for China’s future, while everything will be awesome for the US. He also believes that the world will undergo tremendous deglobalization.
But here’s the deal: Peter Zeihan is the Jim Cramer of geopolitics. Cramer is, of course, the CNBC stock expert, who gives terrible advice regarding stocks. For example, just before the Silicon Valley Bank collapsed, Cramer was recommending the stock. The joke is that if Cramer tells you to buy a stock, sell it immediately.
Similarly, Peter Zeihan is horribly misguided in his geopolitical analysis and predictions. He is blatantly wrong about the past and the present; and his predictions about the future are purely sensational.
Yes, geopolitics has a lot of subjectivity, but this guy is so factually wrong about everything that I had to debunk his claims.
First, Peter exaggerates and lies a lot. He sprinkles his speeches with extreme superlatives – for example, China’s demographics is allegedly not only the “worst” but the worst in the entire world’s history.
Furthermore, Zeihan blatantly lies about numerous statistics and facts.
Let’s take a look at two examples where Peter’s predictions have been totally off the mark:
First, in 2010, he predicted the collapse of China within a decade! He authored a paper - for think tank Stratfor - in which he predicted the economic collapse of China before 2020. At that time, his focus was on the alleged bubbles and the unstable economic system in China. Well, since his prediction, China’s GDP has quadrupled from $4.5 trillion to $18 trillion!
Second, when the Russia-Ukraine war started, Peter had some bold predictions, all of which have failed to materialize. He claimed that before July or August last year, Russia’s exports of oil would fall by 50%, after which the pipelines in Russian oil wells would freeze and explode. And then it would take decades to fix them!
Well, guess what, Russia is exporting the same amount of oil – or even a bit more – today than pre-war. The geopolitical wizard couldn’t foresee India and China stepping up and buying more oil and gas from Russia.
Now, let’s go through some of Peter Zeihan’s extraordinary falsehoods:
**1. China won’t be a functional nation by 2030:
Really! He has said numerous times that China will collapse by 2030. So, how come foreign companies invested nearly $200 billion in FDI in China last year? And why would the US government place sanctions on 500+ Chinese tech companies? Why would the Pentagon form military alliances like QUAD and AUKUS to contain China? I mean, if China is going to collapse within a decade, the West would just sit back and ignore China, right?
Peter-the-fake should talk to the IMF and find out why they say that whopping 35% of world’s growth this year will come from China. Meanwhile, the US and the EU combined will be only 10%.
The IMF also predicts that, over the next five years, for every $100 of global GDP growth, $22 will come from China and only $11 from the US. Thus, China’s contribution will be twice that of the US.
Also, nations around the world are signing multi-year – and sometimes multi-decade - deals with China.
In conclusion, China won’t be collapsing by 2030 or anytime this century.
By the way, China watchers and the US media have been predicting the collapse of China for two decades. It’s a fetish and delusion.
Now, the second crazy statement from Zeihan:
**2. Chinese Yuan has no value!
For a supposedly geopolitical expert, Peter Zeihan has no clue about the internationalization of Yuan! He repeats the logic of Reddit kids who always say that because the Yuan is not freely traded in the global currency markets, it is useless.
Let’s start with the earth-shattering statistics from March 2023. For the first time ever, Chinese yuan surpassed the US dollar in cross-border transactions in China! Whopping 3.7 trillion yuan were used in payments and receipts in just one month.
And then there was the historic transaction between the UAE and China in March. For the first time ever, liquefied natural gas was sold for Chinese yuan.
Within a couple of years, all the Arab countries will be selling oil and gas for yuan. That will be the true birth of petroyuan.
Let’s not forget that Yuan is one of the five elite currencies that make up the IMF's SDR basket. This is why, 70+ countries already hold yuan in their foreign exchange reserves.
Then there is the astonishing fact that yuan is now used more than the Euro for global trade invoicing! That is, countries around the world use yuan more than the Euro to buy goods and services. This should not be surprising since China is the world’s largest exporter and is the #1 trade partner for 140 countries.
Also, China’s Belt and Road Initiative – the largest infrastructure project in human history – helps the yuan go global. For example, Saudi Arabia is getting loans from a Chinese bank to fund Neom, the futuristic Saudi city.
Recently, thanks to US sanctions, yuan has become even more popular. 70% of the trade between Russia and China is now conducted in rubles and yuan. More astonishingly, Putin said that Russia will trade with Asian, African and Latin American countries in yuan. This is a game-changer!
US allies Brazil and Argentina have announced that they will use yuan for trade with China. And even Australian iron ore companies are accepting yuan as payments.
Here is the big picture: Chinese yuan will become a global trade currency. And it will happen without the yuan becoming a reserve currency.
So, for example, Saudi Arabia can sell oil for yuan. And then use the yuan to buy Chinese goods and services. If Saudi Arabia has excess yuan, then it can either trade it for Saudi riyal, euro or dollar.
Now, on to Zeihan’s third claim.
**3. China’s demographic crisis
This is perhaps Zeihan’s greatest hit. His propaganda is a mix of facts, lies and gross exaggerations. Let’s take a look.
For starters, almost all developed nations have demographic problems – i.e., aging population, shrinking workforce, low fertility rates etc.
Thus, China’s problems are overblown. In fact, China and the US have the same median age! Imagine that. Half of all Chinese and Americans are over the age of 39.
China is actually many years younger than most, if not all, the developed countries in Europe – Germany, France, Spain, Italy, UK etc. Also, in 2019 – before COVID - China’s fertility rates were much higher than these European countries, which have rates well below 2.1 or the replacement rate – for example, it’s 1.2 in Italy and Spain. But nobody is talking about demographic crisis or economic collapse of these countries!
Now, the excuse used by Peter Zeihan supporters is that these countries can depend on immigration to keep the countries young.
However, immigration is not a panacea. If it were the case, all these countries would just open up their borders to immigrants from all over the world! The more the better, right? Obviously, this is a crazy idea that ignores the numerous challenges associated with immigration.
Take for example, Sweden. In big cities like Stockholm, two-thirds of children are immigrants and non-whites. Europe is destined for chaos and even civil wars within a couple of decades. Even in the US, the supposed melting pot, the demographic changes due to immigration of non-whites is causing a lot of upheaval. Think, Trump supporters.
In general, many countries will have all sorts of societal problems in the future.
As for China, it has more leeway to handle the financial problems associated with an aging society. This is because the current retirement age for men is 60 and 50-55 for women based on their jobs. Thus, China can slowly raise the retirement age, if need be.
Other solutions for China include the use of AI and robots, offshoring low-end manufacturing, and even some immigration from neighboring Asian countries.
Back to Peter Zeihan, who spews three crazy but popular lies about China’s demographics:
1. That there will be more retired people than workers by 2030
2. That China’s population will drop by 50% by 2050
3. That Chinese are having no children
Let’s take a look at the first claim that China will have more retired people than workers by 2030. This is an absurd lie. In 2030, 26% of Chinese will be retired, while 63% will be of working age population. If China increases the retirement age a bit, there will be 2 workers to one retiree.
This can be easily verified by looking at the current population pyramid. We know exactly how many people are going to retire next year, the following year, and so on.
BTW, in 2030, China will be better off than the US in terms of the percentage of working age population.
Now, Zeihan’s second claim: That China’s population will shrink by half by 2050. This is just not mathematically possible. All the forecasts say that China’s population will be down 50% by the year 2100, not 2050. So, shameless Peter Zeihan just fudged the statistics by staggering 50 years!
There is a Chinese professor named Yi Fuxian who lives in the US. He’s very anti-CPC (or CCP) and has written many articles about how the Chinese government lies about the population. He claims that China’s population is 120 million less than the official numbers. Even according to that gloom-and-doom professor, China’s population will be 1 billion by 2050, not 650 million as Peter Zeihan claims.
Let’s discuss the last point about “Chinese having NO children.” Once again, a typical Zeihan exaggeration. In 2019, before the pandemic, Chinese had 14 million children. The newborn number fell dramatically during COVID years to 10 million. It’s bad but is not “zero” as Peter dramatically claims. What a doofus!
Even if the number of new babies stays at 10 million a year on the average, there will be 200 million new Chinese within a decade. The Chinese government can also nudge the numbers up with good policies – like, say, tax cuts and subsidized housing for couples with kids.
One final note on population. AI experts like Kai-Fu Lee predict that half of the jobs will be gone by 2040, thanks to robots, automation and artificial intelligence. Given such radical transformations, China will be better off with fewer people.
Now, Zeihan’s fourth crazy analysis:
**4. China’s dependency on food. And how 500 million Chinese may die within a year
This is another sick disaster-porn spread by Peter Zeihan. According to this deranged narrative, if the US refuses to protect the trade routes in the oceans, other nations will attack ships that carry food to China. And since China is so food insecure, 500 million Chinese will die within a year.
My God, there are so many insanely wrong things about this narrative, it’s hard to know where to begin!
First, China is not food insecure! China is the world’s largest producer of wheat, rice, vegetables, fruits, chicken, pork etc. And China is the second largest producer of corn in the world. China is self-sufficient in food. Nobody will die of famine.
The only thing that China depends a lot on other countries for is soybeans. And what is it used for? Feeding pigs and cows. So, in the worst case there is disruption to soybean supply, the Chinese people will have to eat a little less pork. Or, they can even get sunflower seeds from Russia and substitute it for soy.
By the way, if you had followed the recent news on Brazilian President Lula’s visit to China, you would know that China doesn’t have to worry about soybeans, since Brazil is the world’s largest exporter.
Next: #5 crazy Zeihan claim:
**5. Many Countries hate China
Peter also claims that numerous countries hate China and are just waiting to attack it or would like to see it collapse. This is just an American wishful thinking, similar to how Biden and the media crowed that Russia would be isolated after the US/EU sanctions.
China is very smart at diplomacy. Just look at how leaders of countries all around the world line up to visit Beijing. Just in the last few months, leaders of Germany, France, EU, Brazil, Malaysia, Singapore etc. have gone to China.
Even though some countries like Vietnam and the Philippines have some serious disputes in South China Sea, their largest trade partner is China. Their economies are deeply interlinked with China in a win-win relationship. In a recent study by the Australian Lowy Institute, China was a clear winner in South-east Asia, in terms of economic and diplomatic influences.
And don’t forget that 157 countries have signed up for China-led Belt and Road Initiative. China has spent $1 trillion on 1000s of infrastructure projects around the world and has built a huge reservoir of goodwill. African leaders openly mock American and European leaders about the anti-China obsession.
When Xi Jinping went to Saudi Arabia in December, 20 Arab leaders from all over the region came to meet with him. That’s real geopolitical power.
Heck, even French President Macron started talking about multipolar world after visiting China!
Then there is BRICS – a coalition of Brazil, Russia, India, China and South Africa. With two rivals of America – China and Russia – one might think that the group would be a pariah. Well, guess what, 19 countries have applied to join BRICS! And the new aspiring members include Saudi Arabia, Iran, Egypt, Indonesia and even Mexico! Incredible.
Bottom line: Zeihan has a preposterous and misinformed understanding of the world.
Next: #6.
**6. Blockading China
Peter Zeihan’s fantasy of other countries blockading China ignores the reality of how the world works.
First, nobody can just disrupt sea trade. If it were that easy, the US would have blocked all seaborne oil from Russia in the last year.
We live in a deeply interconnected world. China is the world’s largest trading nation. It imports $3 trillion of goods and services; and exports $4 trillion of goods and services. The importers want Chinese money and exporters want goods. Neither one is going to blockade China.
Also, China is a nuclear power with missiles that can reach any part of the world. Nobody will dare to hijack Chinese goods.
Bottom line: No country will listen to the US and block Chinese ships.
Consider antibiotics and medicines for which China is the single most important country in the global supply chain. 50% of world’s antibiotics come directly from China or they are made from raw materials that come from China. Can the US survive without antibiotics?
Take India, which is a significant exporter of generic medicines. However, 70% of Indian medicines are dependent on raw materials from China.
Thus, blockading China means deaths not in China but in the rest of the world. Not an exaggeration.
Similarly, what happens to the three American giants Apple, Walmart and Amazon, which have a combined market cap of $4 trillion… if there’s a blockade on China? Of course, their stocks, along with the entire US stock market, will crash.
And the US retail industry is $6 trillion and accounts for nearly 25% of US GDP and directly employs 15 million people. Imagine the store closures, unemployment and even riots in the US without Chinese goods.
There are many more such examples – rare earth metals, critical minerals, electronics, computers, batteries and so on. Yeah, batteries – how long can an economy function without batteries? China’s global market share of rare earth refining is formidable 80%.
Even in semiconductor manufacturing, China is way ahead of the US and Europe in mid-range chips. By 2025, China will be producing half of all 20nm and larger chips. While these are not cutting edge, they run cars, robots, medical devices, household appliances etc. Furthermore, China is already the world leader in printed circuit boards as well as testing and assembly of chips. Thus, China is an indispensable player in the global supply chain of semiconductors.
Furthermore, China has another option besides the sea routes, thanks to the highways and railways of the revitalized Ancient Silk Road. For example, China gets a lot of oil and gas from Russia and Central Asia, all through land. Plus, every month more than 1000 freight trains transport goods from China to numerous European cities.
Finally, China has the option to retaliate. China now has the world’s largest navy and thus can easily block trades of Taiwan, South Korea and Japan. There goes 80% of world’s semiconductor chips!
China can also seize all the US/EU companies operating out of China – think Tesla, Apple, Nike, GM, Boeing, Starbucks, Marriott hotels and so on.
So…let’s put it this way: there won’t be any blockading of China. Pure rubbish narrative.
Number 7: Fantasies about Deglobalization
Peter Zeihan wrote an entire book on deglobalization, a complete bogus notion. No, the world is too interconnected and interdependent for any sort of deglobalization. At the most there will be fringe reshoring to de-risk supply chain for some essential products.
The first problem with his narrative is his US-centric views. Basically, what he says is that the US will move manufacturing away from China, and therefore the world will deglobalize. What a narcissistic view! That’s like saying, “I am getting a divorce, so the entire notion of marriage in the world is disappearing.”
But he’s also wrong about the US-China decoupling. Let me quote a recent speech by UK foreign minister: “It would be clear, easy - and perhaps even satisfying - for me to declare a new Cold War and say that our goal is to isolate China. However, it would also be wrong. Because it would be a betrayal of our national interest and a willful misunderstanding of the modern world."
Those words apply to the US as well. This is why, a few days ago, US Secretary of Treasury, Janet Yellen, said, "We do not seek to decouple our economy from China's. A full separation of economies would be disastrous for both countries."
Similarly, EU President Von der Leyen recently admitted, “it’s neither viable – nor in Europe’s interest – to decouple from China.”
So, what’s Peter Zeihan’s solution? So easy, just move manufacturing from China to Mexico. Hello! Two glaring problems with this silly idea:
One, China’s manufacturing is 20 times larger than Mexico’s. Which means that just to re-shore 5% of China’s production, you would have to double Mexico’s production. And guess how long it took for Mexico to double its manufacturing capacity last time? 20 years! For India, it took 15 years to double its manufacturing! It’s not easy, folks.
Two, China’s exports are not just t-shirts and shoes. China’s manufacturing is not just assembling iPhones. China has changed a lot. 60% of Chinese exports are now medium- and hi-tech products.
For example, the US Navy depends on precision tools imported from China. Manufacturing such tools require highly skilled workers and cutting-edge factories.
Then, look at critical minerals and rare earth metals. The US depends on China a lot for twenty-five such critical minerals. And the dependency on China varies from 50% to 100%. The minerals include Lithium, cobalt, nickel, graphite, magnesium etc. As for Europe, it gets 98% of rare earth minerals from China.
China also has virtual monopoly in many products made from rare earth metals. For example, China makes more than 95% of world’s so-called permanent magnets. These are used in everything from computer hard drives and medical devices to electric cars, fighter jets and missiles.
Thus, when you look at what the US imports from China, it’s obvious that Mexico or any other country cannot replace China.
Even with something like assembling iPhones – that seems easy on the surface – China’s market share is still close to 90%. India started the assembly of iPhones in 2017. After six years, India manages to assemble only 7% of the iPhones.
There has been one more unintended consequence of the West’s friend-shoring effects. It has made the friends more dependent on China! Genius! For example, Samsung moved all its phone assembly to Vietnam, but guess what? Most of the components still come from China!
The West’s “China plus one” strategy has become “China plus China” strategy!
While you may see more “Made in Vietnam, Malaysia, Thailand, Mexico” etc. labels in the stores, they are still mostly made in China.
So, you see, decoupling is a delusion. The US economy cannot function without other countries. And that’s true for China and all countries in the world.
Next, let’s talk about food.
One of Peter’s ridiculous claims is how the US is not dependent on other countries for food. Once again, he doesn’t care about facts and statistics. The US imports as much food as it exports – about $175 billion! If you have been to grocery store in the US, you would know how much stuff is from foreign countries.
Also, the US is the world’s second largest importer of fertilizer.
So, to summarize this section about deglobalization and the US living in a paradise of isolation, Peter Zeihan is like Peter Pan.
Other Wrong Analyses
There are so many other things Peter Zeihan is wrong about – for example: the future of US dollar, his narratives about the US protecting the sea lanes around the world, how US Presidents have been isolationist since 1992 etc. Just totally bonkers.
All through the Cold War, the US did not allow “anyone to trade anything with any country” as Zeihan claims. To the contrary, the US waged numerous wars, staged coups, imposed sanctions, and assassinated leaders around the world to protect American primacy, access to cheap natural resources, and US corporate profits.
After 1992, the US loved the unipolar moment and decided to be the world’s superpower forever. That’s why, in the 1990s, it waged wars against Iraq and bombed Yugoslavia/Serbia for a decade. Also, all through the 1990s, the US redeployed Al Qaeda from Afghanistan into Chechnya, Central Asia, Kosovo etc.
After 9/11, as General Wesley Clark later said, the Neocons in the Bush administration planned to invade 7 countries in 5 years. And they followed up on their plans. The US bombed numerous countries in the 2000s – Afghanistan, Iraq, Somalia etc. Then in the next decade, the US fueled the Arab Spring, bombed Libya into stone age, started a proxy war in Syria, staged a coup in Ukraine, attempted regime-change in Iran numerous times, carried out coups in Honduras and Bolivia, tried the same in Venezuela… the lists go on.
And now we are seeing how the US wages proxy war on Russia through Ukraine. And the US is busy surrounding China with new military bases, new weapons, and new alliances… all the while trying to turn Taiwan into another Ukraine. The American Empire never sleeps.
The US goal is “full spectrum dominance” all over the world. And this has been openly stated by US military generals.
But Peter Zeihan’s childish spin is that the US doesn’t care about globalization and just wants to be left alone!
Well, that would be a dream-come-true for the rest of the world.
Conclusion
Peter Zeihan is so wrong and so ridiculous that I think he’s a plant by the US deep state. His job is to calm down the American people who might be worried about the state of the country.
It’s highly likely that China will surpass the US as the largest economy by 2030. I have said this for many years and it’s becoming more likely with the tsunami of dedollarization speeding across the world.
The US media, just like Zeihan, constantly spreads misinformation about China. But facts don’t change because someone buries their head in the sand. China is #1 in the world in numerous categories – PPP GDP, manufacturing, exports, patents, scientific papers, electric cars, solar panels, 5G, size of the middle class, number of firms in Fortune 500 etc. China is the world’s #2 in the sizes of stock market and bond market; and in the number of millionaires and billionaires. To dismiss these facts as fake statistics is sheer idiocy.
The US elites have no plans to fix the numerous crises in their own country. Thus, they are resorting to bread and circus of the final days of the Roman Empire.
And Peter Zeihan is one such propagandist to create the delusion of ever-lasting American Century.
But people who believe this sort of narrative will have a rude awakening before the end of the decade. The US dollar’s exorbitant privilege is coming to an end. After that, the US economy will be subjected to an economic shock like that of the 1970s or even the Great Depression of the 1930s. But this time, there won’t be an easy way out of the mess.
If the US elites are honest and patriotic, they would acknowledge the emerging multipolar world and the inevitable relative decline of the US. They would sit down with Russia, China, Iran etc. and create new economic and security frameworks based on the paradigm of equality of nations, cooperation and development.
And they would not waste time and energy on copium and wishful propaganda from the likes of Peter Zeihan.
— S.L. Kanthan
Peter Zeihan is the Jim Cramer of Geopolitics