That's external debt. I'm talking about total private credit.
Private credit is what brought the 2008 crisis in the USA. The public debt wasn't the problem before, but it was after: using public debt to pay private debt from banks.
And that's what the article is also talking about: China keeps the USD in their own banks and prints CNY to spend, but how many USD for how many CNY is not clear.
It's pretty much a Ponzi. As long as people don't ask their USD back from their CNY it's all good. Good luck when people starts asking USD from China.
China TOTAL private credit in CNY is available here:
While not explicitly arguing against this point, I would note that these graphs are from Peter Zeihan, who has explicit financial incentive in convincing people China is on the road to economic ruin. He makes his living as geopolitical analyst and has been predicting the imminent downfall of China since decades ago at Stratfor - if people come to disbelieve his predictions have value, he loses money.
Which doesn't mean he's wrong, but I do think it is important to consider incentives whenever someone is attempting to convince you of something.
Zeihan never shows "just" data. Otherwise he would show PRC has significantly more navigable rivers kms and better port capacity than US. Instead he'll talk US being blessed with more rivers, and deeper coasts for ports. When geopolitics makes US look bad, he'll cherry pick the geo, or the politics to make competitors look worse.
Per the graphs, you're falling for unsubstantiated (borderline retarded) Zeihan visualization/narrative, this time by scaling to 2000 baseline and annotating Zeihan TM wild claims. PRC debt is ~2900% of 2000 baseline, GDP (and per capita) is ~1500% of 2000 baseline. All the graph is reflecting is PRC has built 2-3x debt in 20 years during it's most explosive and condensed development phase where urbanization (and home ownership) increased from 30-65%, i.e no country has been abel to modernize this fast. EVER. For reference, 2020 PRC national debt was ~55% (+20% in 10 years) of GDP vs US was ~140% (+40% in 10 years), total aggregate debt (the #s Zeihan is meming about) PRC ~270% vs US ~800% in 2020.
I don't know what the money "printed" graph data comes from, but PRC covid stimulus/money printing so far retraint vs US 13T. There's reason global economists was hoping PRC would spam the money printing brrrt button to uplift global economy. Meanwhile PRC Q1 inflation rate was ~1%, lowest amoung major economies. Again, that's not remotely reflective of actual Argentina ponzi economy, to the point of being diametrically opposite.
Also this is USD used for reserve, it's USD PRC hoovered up from massive trade surpluses in the first place. PRC exports has increased so spectacularly in the past few years (export value grew from 2.5T in 2019 to 3.6T in 2022). PRC exports grew as much in last 4 years (~1T) as it did in decade between 2008-2018 (1.4T-2.4T). So she's holding a lot of dollars, even if she wants to hold less. Hence trying to increase rmb settlement. In the meantime globe is still shovelling money at PRC, the problem isn't getting it, it's getting rid of it.
> PRC has significantly more navigable rivers kms and better port capacity than US
Rivers in mountains and low quality soil, not connected to any productive land. Look up any map on agriculture land and you'll see their soil quality. It's bad. Compare that with the USA and Argentina. We have both the best in the world.
Then look up how much fertilizer is used in their agriculture, per hectares of arable land. It's bad.
All your numbers may be okay. But the main Zeihan argument is two fold: first, the same from the book "Why Nations Fail". China is not great in their political institutions. It's bad. For example a HN from YESTERDAY:
The second Zeihan argument is demographics. After the One Child Policy, China is the country where population is getting older faster in history, and faster than any other country today. It's bad.
There's a direct relationship between median age and inflation. Because older people consume more than produce, lowers productivity, and that increases prices. From the IMF:
On water, hence huge infra and water transfer projects. Again conditions permitting, the POLITICS can address/mitigate GEO in geopolitics. The reality is PRC water ways are most heavily utilized in the world, meanwhile US waterways, which also requires expensive infra upkeep (read US army engineer corp work), which US Has neglected due to lack of mass infra capability, to the point that climate change is making US river networks too shallow to even transport bulk agri goods. Zeihan has to jerk off to US train network because US lack the infra capabilites to make her rivers work to potential. Yes PRC geo may be "worse" than US on paper, but it's not so worse that coordinated PRC human intervensions can overcome and engineer competitive advantage when lacking natural blessings. People seem to forget PRC geography sustained dominant Chinese societies for 1000s of years. It may not be as blessed CONUS, but it's not antartica, ultimately Chinese geography is better than most of the world for human flourishing. That's why there's 1.4B people there.
On soil/ag, yes per capita PRC land/water resources limited, but reality is PRC is increasing absolute food security, per capita staples production went from 350kg to 400kg over 20 years with 200M extra people. That's absolute food security in terms of calories. Which BTW since population are net declining, resource stress will only reduce over time. Fertlizer consumption also digression, it's mainly due to PRC choosing to (successfully) spam fertlizer while taking time to figure out GMO agri policy and agriculture being makework jobs or 200m famers when really GMO+automated large scale agri can optimize. It's a politcs issue being addressed, but it's not the wanking material PRC collapsists want it to be. Yes it's more constrained than US agri powerhouse, unless full blown maritime war (queue Zeihan blockade meme), in which case everyone, including US will starve because reality is, PRC conventional missiles can take out 150 US refineries to stop most energy/agri inputs (including fertilizer). Because once again, POLITICS, in this case technology, can trump geography. I surmise Zeihan will still laud US shale/energy autakry when reality points to US losing actual energy security because gunpower can now pierce his "fortress America".
On PRC political instutions, they're fine/great. His entire argument over cliques and wealth transfer between provinces (which US does between states), is more PRC collapse talk for his audience who laps it up. Like PRC didn't become first competitor US seriously worries about threatening US primacy since WW2 (i.e. more so than USSR) for doing a "bad" job. For reference most of PRC defense modernization, moving up value chain, leading innovation/R&D indexes happened in last 10 years, after Why Nations Fail. To throw Zeihan bone, his assessment on PRC military might have been closer to truth in the 2010s based on info from 2000s, but this isn't 2000s anymore. There's a reason Zeihan doesn't get invited to any credible think tanks to talk - he doesn't actually know much of the politics.
On demographics, this is where popularizing of simplistic Zeihan analysis from naive population pyramids readings generates the most basic collapists narrative. Especially when talking about geopolitics / strategic competition. It's not just the general demographic trend that determines outcomes - it's not subsistence farmers driving up productivity and building national power but skilled labour coordinated at scale. Most of East Asian tigers with shit TFR grew massively and are leading various strategic tech industries because they simply had more aggregate talent than previous generations. Now consider PRC is generating more STEM than OECD combined (~5m), because even with bad TFR and 20% youth unemployment, PRC massive population baseline is producing the greatest high skill demographic divident in recorded history. Without exaggeration, literally never in human history will so many educated / skilled bodies been produced and coordinated within one country, multiple times more than US an absorb via immigration. Sure, PRC net demographic decline might be a factor starting in 2050s (not a death spiral because PRC high savings/ownership insulates), but for next 30 years, and especially within frame of Zeihans geopolitical competition, PRC has the greatest demographic potential in the world, , and it's not even close. Consider 2000 PRC GDP was ~1T @ ~2M STEM grads, 2022 GDP ~18T @ ~17M STEM. All recent news of PRC leading in various S&T, R&D, industries etc? Lag effect from 2010s when PRC had less than 17M STEM. Now project to 2030 with STEM @ ~50M, likely topout ~80-100M @ 2050. This simply reflects PRC demographics moving from 25% skilled work force to 60-80% like developed countries, i.e. it's not going to stagnate like JP who simply can't produce enough skilled talent at parity. PRC for next 30+ years is going to gain significantly more productive people even if there's less people. And when they stagnate/decline from when net population loss actually effects that cohort, they'll be doing so from a much higher baseline than now. Also less net people = less import dependency which Zeihan likes to wank about. TLDR is PRC relative to geopolitical constraints, currently has probably the the most FAVOURABLE demographic trends for geopolitical competition.
> That's absolute food security in terms of calories.
No.
Despite its domestic production, China has been a net importer [DOC] of agricultural products since 2004. Today, it imports more of these products—including soybeans, corn, wheat, rice, and dairy products—than any other country. Between 2000 and 2020, the country’s food self-sufficiency ratio decreased from 93.6 percent to 65.8 percent.
China’s authoritarian regime has become increasingly repressive in recent years. The ruling Chinese Communist Party (CCP) is tightening its control over the state bureaucracy, the media, online speech, religious groups, universities, businesses, and civil society associations, and it has undermined its own already modest rule-of-law reforms.
Absolute food security = producing enough calories per capita indigenously to feed everyone. Which PRC does, ~4000 calories per day factoring in massive waste/spoilage in logistics system. So Yes. SSR is indication of PRC getting richer and importing more luxury foods, but that's not part of absolute food security.
Quoting freedom index, from heritage and freedhomhouse no less as proxy for state capacity is more asinine than using Zeihan stats and deserves even less of an effort response.
My assertions and datapoints are all public info - it's basic subject matter knowledge for those who follow the space closely and realize actual data/trends horribly dismantles Zeihan's model that's mainly used to sell lectures and dinners to American exceptionalists. Again there's a reason he doesn't get airtime in "serious" think tank circles. At least Dalio, puts money where his mouth is vs Zeihan. And it's a little rich to point out wishful thinking on Dalio considering Zeihan's Stratfor/Friedman background that has been consistently wrong about East Asia.
Again, I am not making a counter argument. I am pointing out Zeihan has explicit incentive to show a specific narrative - it's perhaps the single largest and oldest tentpole of his career.
Is the data the whole story? Are there mitigating factors? Does it need mitigating factors to begin with? I don't know. I even explicitly mentioned he could be totally right on this specific point.
I'm simply stating that there is a caveat around the source of those graphs that interested parties should take note of, for the same reasons we ask scientists, journalists, etc., to disclaim any potential conflicts of interest they have.
I have a personal bias because I'm from Argentina and I see the world becoming more like my country. Countries printing money like there's no consequences or tomorrow.
Argentina's public debt has been pretty stable and on GDP terms it was quite low. But even then, on low public debt, a country can totally wreck the whole economy.
Because we print pesos, ARS, like there's no tomorrow and then people get surprised when we get inflation and a total wreched economy. Then populists start blaming the usual suspects: IMF, USA, EU, the f weather.
People confuse public debt with private credit. The general idea in Argentina, including Ministers of Finance and Central Bank officials, say that ARS credit is not real debt.
Move forward 20 years and you get Argentina.
Edit
In Argentina, private credit ARS bonds are called LEBAC and LELIQ for those who are interested.
Last time I checked China was ~23T in debt vs USA’s ~32T. They also have a population almost 5 times larger.