Predictions for 2010-2020

[PeterCH]

Business Insider reports on Stratfor.com's predictions for the upcoming decade.

Basically economic meltdown in China (and collapse), population and economic decline in W. Europe/Russia/Japan (as their population ages), a more bossy Germany and Russia, weakening of the European Union and a dominant United States. The US won't go away, it will be challenged more but it will stay around as the dominant power, both merchant and naval.

Highlights:
http://www.businessinsider.com/stratfor-predictions-for-the-next-decade-2010-1

Full Report:
http://www.stratfor.com/memberships/152578/forecast/20100120_decade_forecast_20102020

(Requires email address for free access).

Not republished for copyright reasons.

 

[Morgoth]

not so sure about the Chinese meltdown, all I do know is that Africa's population will probably increase by 50%

 

[PeterCH]

not so sure about the Chinese meltdown, all I do know is that Africa's population will probably increase by 50%

Why not so sure.... it's a bubble like Japan and Korea was. Now Japan's in deflation with the biggest public deficit in their history, Korea is not far behind. China also has an aging population, tons of bad (local) debt and inefficiencies with corruption. Statfor have been pretty accurate before.

 

[Morgoth]

China has the population to sustain it though, which is much larger than Japan. Also their whole socialism is moving into the perestroika direction, maybe they can perfect it. And they have much more resources then Japan, both in Africa and in China, they will still hang around for quite some time.

 

[PeterCH]

China has the population to sustain it though, which is much larger than Japan. Also their whole socialism is moving into the perestroika direction, maybe they can perfect it. And they have much more resources then Japan, both in Africa and in China, they will still hang around for quite some time.

Stratfor gives different reasons in some way for China vs Japan but the meltdown in there - mostly because China is growing so fast - its a bubble economy. Share prices of companies are hyped up by the government (think Enron). Many companies are subsidized by the government but are not profitable. Many banks have tons of bad debt. There are also issues of food production and access to water.
The independent factor however is this aging population. Life expectancy is increasing while there are fewer and fewer younger people because of the 1 child policy. That will hit China very hard. Oh and yeah - that's hitting Europe now already especially Western Europe and Japan and Korea but these places did not have a mandatory 1 child policy.

 

[Morgoth]

The average educated women has 2 children, the average uneducated women has 6, there is the big difference between Europe and Africa,

but take it into consideration...

China has 1.2 billion people, take 30% away and you still have 840 million people. half it and you still have more people then the Entire North America. For every Chinaman that dies there is about 5 to replace him. Population density is very heavy.

The one Child policy is a good thing, a small population is easier to manage and I doubt all of the population is employed or fully working to their potential, despite the socialism there. I am also not so convinced in their economy being that much of a buble, its a black box for sure, but they have a lot of foreign investments. Japan is mainly a manufacturing giant, hardly any resources while china can sustain itself and its manufacturing better..

I do not agree with Stratfor's argument of china not having enough resources, they have tons of foreign investments in Africa and have the manpower to not use African labour, just another exploiter.

The are due to an economic klap big time, but not in the next 20 years or so.

 

[PeterCH]

The average educated women has 2 children, the average uneducated women has 6, there is the big difference between Europe and Africa,

Er no they have fewer than 2. In fact you need more than 2 to compensate per family unit to work for all these senior citizens. Germany has 1.36 births per woman for example. Even those figures are inflated by IMMIGRANTS.

China has 1.2 billion people, take 30% away and you still have 840 million people. half it and you still have more people then the Entire North America. For every Chinaman that dies there is about 5 to replace him. Population density is very heavy.

Previously you had fewer old people because they died of earlier. You also had fewer children because of 1 child which happened suddenly - was forced on the Chinese. In the beginning that was OK, you had lots of young adults - ready to work on the fields and in factories. Nice. However, these people are now aging and they will be approaching retirement. The bulk of those 840millon you cite will get old - and with fewer children around because of 1 child - WHO WILL WORK FOR THEM? That's the point.

By 2050 there will be 440 million elderly people in China with fewer productive people to work for them then are now. The dependency ratio is increasing.

The one Child policy is a good thing, a small population is easier to manage and I doubt all of the population is employed or fully working to their potential, despite the socialism there. I am also not so convinced in their economy being that much of a buble, its a black box for sure, but they have a lot of foreign investments. Japan is mainly a manufacturing giant, hardly any resources while china can sustain itself and its manufacturing better..

It's not a good thing because it's not natural. As said you come to a point where the parents of the one child policy are elderly and can't work. Now the children - 1 child for 2 parents - must work for those 2 parents. Granted some parents will die off earlier, but more and more people are surviving longer and longer - even in China.

I do not agree with Stratfor's argument of china not having enough resources, they have tons of foreign investments in Africa and have the manpower to not use African labour, just another exploiter.

What manpower. When you must spend so much of your GDP on social spending - what money is left over to mine and produce for profit or exploit Africa? Who will buy your goods? Domestic market? Will these elderly people need cars and electronics? Who will run these companies? Who will do the digging?

 

[boramk]

China's economy is what it is BECAUSE of the 1.2 Billion people. They very notion of "Hey, it has so much people, if it loses a few it will still be strong" is a very inane one. The one-child policy will bite them in the arse...

As for China's collapse, its analogical to Japan of the 1980's; set to take over the US as the world's largest economy, strong growth, acquisition of many firms to Japan.. All this did was set a large asset bubble which contributed to economic stagnation and deflation for over 20 years. I see China going through the same thing: many empty apartments bought, land prices soaring, the Chinese have money, and they are only spending it to augment their bubble.

As for China's growth, it's only attributed to domestic demand via government stimulus. This only will exacerbate their bubble. Had it not been for the stimulus however, with collapse of exports, China wouldn't have been the "winner" it is seen today.

The replacement rate is 2.11 children per women. The developed world is seeing much lower than this. No it's not good, a better controlled population? That seems to be the general consensus among people who just don't seem to understand the implications of such a thing

 

[PeterCH]

China's economy is what it is BECAUSE of the 1.2 Billion people. They very notion of "Hey, it has so much people, if it loses a few it will still be strong" is a very inane one. The one-child policy will bite them in the arse...

As for China's collapse, its analogical to Japan of the 1980's; set to take over the US as the world's largest economy, strong growth, acquisition of many firms to Japan.. All this did was set a large asset bubble which contributed to economic stagnation and deflation for over 20 years. I see China going through the same thing: many empty apartments bought, land prices soaring, the Chinese have money, and they are only spending it to augment their bubble.

As for China's growth, it's only attributed to domestic demand via government stimulus. This only will exacerbate their bubble. Had it not been for the stimulus however, with collapse of exports, China wouldn't have been the "winner" it is seen today.

The replacement rate is 2.11 children per women. The developed world is seeing much lower than this. No it's not good, a better controlled population? That seems to be the general consensus among people who just don't seem to understand the implications of such a thing

True, what internal demand there is in China is ramped up by the CP. Of course the Chinese people themselves are just saving and re-investing - as said.

 

[PeterCH]

It should be said that the US is not facing the population bomb that Europe/East Asia is facing.

 

[Morgoth]

China's economy is what it is BECAUSE of the 1.2 Billion people. They very notion of "Hey, it has so much people, if it loses a few it will still be strong" is a very inane one. The one-child policy will bite them in the arse...

yes, but a one child policy is better then a 6 child one where he population growth rate is just to heavy, at the current rate the world population doubles every 30 years or so. The African one trippled between 1940 and 1980.

As for China's collapse, its analogical to Japan of the 1980's; set to take over the US as the world's largest economy, strong growth, acquisition of many firms to Japan.. All this did was set a large asset bubble which contributed to economic stagnation and deflation for over 20 years. I see China going through the same thing: many empty apartments bought, land prices soaring, the Chinese have money, and they are only spending it to augment their bubble.

surely the Chinese will see this coming? they knew the implications when it came to 1 child policy, I don't agree that It needs all 1.2 billion to sustain its economy though, it can do with a few less people, meaning a larger % of the population gets educated is one good thing that came come out of it. as soon as China puts down the 1 child policy then the entire population can be replaced within 20 years, its hardly a cause for concern, the biggest one at the moment seems to be the Enron type system that is going on at the moment, but I do believe they can keep going the way they are for at least another 30 years.

As for China's growth, it's only attributed to domestic demand via government stimulus. This only will exacerbate their bubble. Had it not been for the stimulus however, with collapse of exports, China wouldn't have been the "winner" it is seen today.

Time for China to switch the lights off in Europe so its population grows way more.

The replacement rate is 2.11 children per women. The developed world is seeing much lower than this. No it's not good, a better controlled population? That seems to be the general consensus among people who just don't seem to understand the implications of such a thing

a growing population is also not a very good thing, more people requires more expansion, more governmental expenses, sure the economy gets more out of it, but in the long term it ends up in a scamble for resources.

 

[Morgoth]

It should be said that the US is not facing the population bomb that Europe/East Asia is facing.

Why is it though? the US have a fairly good education system, have the same living conditions as in Europe but their population seems to be going up?

 

[boramk]

yes, but a one child policy is better then a 6 child one where he population growth rate is just to heavy, at the current rate the world population doubles every 30 years or so. The African one trippled between 1940 and 1980.

Oh boy.. No, the more workers you have, the more output, more efficiency, in any case, economic growth. Less people, less output, less efficiency, hard times ahead

surely the Chinese will see this coming? they knew the implications when it came to 1 child policy, I don't agree that It needs all 1.2 billion to sustain its economy though, it can do with a few less people, meaning a larger % of the population gets educated is one good thing that came come out of it. as soon as China puts down the 1 child policy then the entire population can be replaced within 20 years, its hardly a cause for concern, the biggest one at the moment seems to be the Enron type system that is going on at the moment, but I do believe they can keep going the way they are for at least another 30 years.

Easier said than done. The one child policy has already had an irrevocable effect. Beijing and Shanghai has already tried to pay couples to have more kids, this was an absolute failure... China has a ticking time bomb. With 440 Million pensioners, who pays for all that?

Why is it though? the US have a fairly good education system, have the same living conditions as in Europe but their population seems to be going up?

Immigration. The US is still, and will be for long time, the world's number one destination for immigration.

 

[WilD_CaT]

There is a fair indication that China also has a housing or property bubble immerging at the moment.

The question is whether or not this affects their entire economy. If their banking institutions also engaged in poor practices then we might get worried about a Chinese collapse. This is unlikely. Moreover China's economy is not built around property speculation unlike Dubai, so even if the bubble bursts, it shouldn't have a global economy changing impact.

More worrisome is when the inflation due to all the bailouts and rampant printing of money in the U.S. will start to hit and how badly it will be. At the moment the only reason foreign countries such as China are still willing to buy dollars (Issue debt) and take interest payments in dollars is that the dollar still has value.

If inflation hits and the dollar starts losing value quickly, this will lead to other countries no longer accepting U.S. dollars and it will be the end of the dollar.

This is the worst thing that could happen in the next 10 years or 20 or 30 for that matter. Unfortunately if the U.S. tanks, so does the rest of the world.

If the U.S. is going to go more socialist in home and more "imperialist"(Strong word I know) and continue to fight wars overseas, then this is also likely to place a massive strain on the US government and will in all likely hood increase their amount of debt taken. Thus means more money being printed which means weakening dollar etc.

Bigger government, bigger wars, more debt, more money printing will mostly likely result in the collapse of the dollar. Which is imho the worst case scenario for the next 10 years.

The chance it will happen? Who knows? However history and common sense shows you can't run the printing press forever.

As far as the age population debate goes: Remember it depends on how much the elderly rely on the state. How big the "welfare" state is. Japan is a big welfare state, with the elderly relying on younger generations. So the aging population is always an issue.

The people in China, whilst being a more socialist/communist state, have a strong desire to save money. If the elderly have savings then the significance of an aging population is not a big issue as they can take care of themselves.

So it doesn't matter if you have the welfare state as long as people don't use it. However common sense says if you know that the youth with take care of you via the welfare system, then what is the point of saving for retirement? I guess it depends on what the people in China do.

If they save(I.E. the current trend of saving continues) then age thing won't be a problem. If they don't save, then it will create a massive burden on the government and economy. But I don't think that will happen in 10 years. I think it will take much longer.

An interesting point about China, a major factor in the Chinese economy is the export side of things. This relies on a traditionally weak yuan. So if China prints a bit of money (Stimulus) but not too much, then they can keep the yuan weak and the export side of things strong. Although this will hurt China domestically as the easiest way of weakinging the yuan is buy lending money or easy credit, which as we know leads to bubbles. So there is a bit of catch 22.

Another problem in the coming 10 years could be a worldwide food shortage.
> I've read various articles from various sources indicating crop yields are expected to be very low
> With the greeny/fuel debate going more land is gonna be used for biofuel instead of food. Depending on legislation and the oil price, you might start seeing people preferring to use biofuel, creating a market for it and thus biofuel and food will have to compete for land. Depending on which is more profitable we might see a food shortage.
> Who knows where the climate is going? If it gets warmer but precipitation decreases (Desertification) then that will only make the potential food problem worse.

@Morgoth: The US has a terrible public education system. Not as bad when you compare it to South Africa, but we are hardly a beacon of light.

US as far as I am aware for the most part still has better standards of living than many places in Europe.


In conclusion:
If you believe in the weakening dollar or poor world economy then move to "real" assets or commodities such as gold.
If you believe in a food shortage stock up on tin food and buy a gun.

If you don't, don't.

 

[krycor]

I also go with the dollar getting into more and more problems in the next handful years, you will see as countries make more and more concessions to Americans in the hope it doesn't go sour which inevitably it will but it taking the whole world with it is bull. It won't, most countries are acutely aware of this which is why the Americans keep putting out feel phrases to reassure people its still safe. Sadly though the countries who would get hut the most are the poorest ones due to the way the US structured the WTO etc

The population thing with the US is BS. You guys quite happily claim the US has a good rate and then, in the same breath, compare it to European countries and point out its artificially high due to immigrants. Sure the US doesn't have that issue hey ahahahaha Truth is their european is equally under pressure with it being outnumbered in the next 10-15yrs. When you think American, you won't be thinking white people.. check up, the highest population increases are from the latino immigrants as well as indians(they everywhere ) and others. Their european population is just about holding up with rate but as will rest of the world they on the decline. I guess all in all, the age of europeans are coming to an end in an ironic twist of events.

 

[PeterCH]

I also go with the dollar getting into more and more problems in the next handful years, you will see as countries make more and more concessions to Americans in the hope it doesn't go sour which inevitably it will but it taking the whole world with it is bull. It won't, most countries are acutely aware of this which is why the Americans keep putting out feel phrases to reassure people its still safe. Sadly though the countries who would get hut the most are the poorest ones due to the way the US structured the WTO etc

The population thing with the US is BS. You guys quite happily claim the US has a good rate and then, in the same breath, compare it to European countries and point out its artificially high due to immigrants. Sure the US doesn't have that issue hey ahahahaha Truth is their european is equally under pressure with it being outnumbered in the next 10-15yrs. When you think American, you won't be thinking white people.. check up, the highest population increases are from the latino immigrants as well as indians(they everywhere ) and others. Their european population is just about holding up with rate but as will rest of the world they on the decline. I guess all in all, the age of europeans are coming to an end in an ironic twist of events.

Why don't you be polite and intelligent and read the actual StratFor article. It is free. Otherwise don't comment please.

The age of Europeans isn't coming to an end, any more so, than age of Indians and Chinese. The world goes in cycles. What they present is that stagnation and nationalist policies are in Europe's future for the next few decades - after that with rising populations again - as more young people have offspring we'll see improvements. In the short to medium term Europeans will have to cut down on social support and work longer (retirement age of 60-65 will have to increase to 67 and beyond). Europe fought two great world wars, the first decimated much countryside, broke the bank in many countries and wiped out huge numbers of able bodied workers and educated middle class men. At the same time the Spanish Flu hit the Spain. The Russian revolution almost destroyed Russia. 20 years later WW2 destroyed most of Europe and wiped out 50 million people. In many countries the intelligentsia were exterminated. Europe recovered from that. What we have now is a crysis but of far less dramatic proportions. To suggest that the age of Europeans is over, is to ignore the history of Europe, and not just the last 100 years, but the last 2000.

USA does not have this problem. Also the reasons behind US greatness are still there.

The US will continue to be successful while China and India will go down. In fact because of China, India is sucking so much at progress.

Anyway, read the article.

 

[Morgoth]

Oh boy.. No, the more workers you have, the more output, more efficiency, in any case, economic growth. Less people, less output, less efficiency, hard times ahead

the more people you have, the more schools and social spending you need, the more employment is needed, having a positive population growth is much worse then a negative one imho, look at Africa, most of the states in the 1960 , Tanzania, Zimbabwe-Rhodesia, Guinea, South Africa, Botswana and Kenya that were semi successful or have some form or prosperity couldn't keep up with the population growth (not to mention negligence and miss management kinda killed it for the majority of Africa ). The average population in Africa grows by 1 million per month on average, its a good thing if you can employ them, but currently we can't China realised that they will eventually reach a peak, the 1.2 million might be it, in some cases they have a big population density and communism won't keep them all employed for a while, the population needs to be reduced, hence their 1 child policy in heavy populated areas and 2 child in lesser areas. If you can't employ all of them then the country will follow Africa's example of anarchy, now having 1.2 billion people that goes into anarchy cannot be a good thing.

Easier said than done. The one child policy has already had an irrevocable effect. Beijing and Shanghai has already tried to pay couples to have more kids, this was an absolute failure... China has a ticking time bomb. With 440 Million pensioners, who pays for all that?

if every house hold in China has 3 children at the current moment then wow their entire population grows way bigger, exponential child growth is much worse then population decline, the 1 child policy only applies in certain places in China where population density is heavy and everyone cannot be employed.

Immigration. The US is still, and will be for long time, the world's number one destination for immigration.

but, you had the argument that the European countries have increasing households due to immigration, surely the majority of the US aren't immigrants?

 

[PeterCH]

the more people you have, the more schools and social spending you need, the more employment is needed, having a positive population growth is much worse then a negative one imho, look at Africa, most of the states in the 1960 , Tanzania, Guinue, South Africa, Botswana and Kenya that were semi successful or have some form or prosperity couldn't keep up with the population growth (not to mention negligence and miss management kinda killed it for the majority of Africa ).

You need a balance. You need to have enough children to account for the attrition rate of children dying before they can enter the workforce, young people dying before they can be productive etc. Also remember people are living longer and will continue to do so.
Children in schools are investment for the future, old age pensioners are a burden to society. However, those pensioners were productive once. They can't just be dumped and left to die or killed off. So you need a balance of some sort.

The average population in Africa grows by 1 million per month on average, its a good thing if you can employ them, but currently we can't China realised that they will eventually reach a peak, the 1.2 million might be it, in some cases they have a big population density and communism won't keep them all employed for a while, the population needs to be reduced, hence their 1 child policy in heavy populated areas and 2 child in lesser areas. If you can't employ all of them then the country will follow Africa's example of anarchy, now having 1.2 billion people that goes into anarchy cannot be a good thing.

That population grows largely because of Western Aid and advances in medicine - immunisations and better antenatal care for mothers and better early child health care. China going into anarchy is the biggest fear of the Chinese Peoples' Communist Party. It's the reason why they censor the internet, ban pr0no and other subversive literature and have to maintain a 7-8% growth to accommodate these people. The growth is often maintained artificially by making bad loans to state enterprises which are not productive or by subsidies or by the state buying up stuff.

if every house hold in China has 3 children at the current moment then wow their entire population grows way bigger, exponential child growth is much worse then population decline, the 1 child policy only applies in certain places in China where population density is heavy and everyone cannot be employed.

1 child policy was applied across all of China.

but, you had the argument that the European countries have increasing households due to immigration, surely the majority of the US aren't immigrants?

US tends to ONLY let highly educated people in. Secondly there is still positive growth in many parts of the US, even amongst the whites (Bible Belt).

 

[Morgoth]

You need a balance. You need to have enough children to account for the attrition rate of children dying before they can enter the workforce, young people dying before they can be productive etc. Also remember people are living longer and will continue to do so.
Children in schools are investment for the future, old age pensioners are a burden to society. However, those pensioners were productive once. They can't just be dumped and left to die or killed off. So you need a balance of some sort.

of course you do, but the 1 child policy was meant to manage it, put it into perspective, the global population doubles every 25 years, in china's case that is 2.4 billion people at 2035 , the is an average increase of 40 million people per month, now some child restrictions is needed, there is just no way a government can keep up with such a high influx of workers, you need to invest in future education yes, and you do need a healthy growth, but where do you draw the line? Also, there has been cases in China where parents have more then 1 child and the kid is never registered and lives to be uneducated, its 1 of the problems with 1 child policy.

That population grows largely because of Western Aid and advances in medicine - immunisations and better antenatal care for mothers and better early child health care. China going into anarchy is the biggest fear of the Chinese Peoples' Communist Party. It's the reason why they censor the internet, ban pr0no and other subversive literature and have to maintain a 7-8% growth to accommodate these people. The growth is often maintained artificially by making bad loans to state enterprises which are not productive or by subsidies or by the state buying up stuff.

its all part of the pros and cons of communism, I just don't see a 1.2 billion population going into anarchy being good at all, even democracy won't be able to keep them all together.

1 child policy was applied across all of China.

from wikipedia

A spokesperson of the Committee on the One-Child Policy has said that approximately 35.9% of China's population is currently subject to the one-child restriction.[3] The policy does not apply to the Special Administrative Regions of Hong Kong and Macau, or Tibet................................................................The policy is enforced at the provincial level through fines that are imposed based on the income of the family and other factors. Population and Family Planning Commissions (Chinese: 计划生育委员会) exist at every level of government to raise awareness about the issue and carry out registration and inspection work. Despite this policy, there are still many citizens that continue to have more than one child.[7]

some regions with high population density have it rougher then others, hence they are under a communist regime its easier to control where the policy should be best adapted. Richer people gets to have more children, poorer people gets fewer, it would be awesome to have that in South Africa.

US tends to ONLY let highly educated people in. Secondly there is still positive growth in many parts of the US, even amongst the whites (Bible Belt).

I guessed the bible belt argument, the US can employ them too though hence the nature of their economy.

 

[Morgoth]

Morgoth, i don't think that it would even be difficult to have such a system in a completly capitalist government. again we simply need to make use of a bit of tech and we're there, a usb pregnancy test add a 3g chip, an oracle database and ur done.

The biggest problem in South Africa is that we are actually encouraging unemployed women to have more children, currently they get R350 per child, they get 6 childs and that a good income, of course they dump that child on the streets hence we have unemployment and illiteracy.

what I suggest we do is we actually pay them per child that they don't have, say you get R1000 if you have 1 or 2 children R800 for 3, and work your way down. The only issue we can have with that though is that most children won't be registered, causing an even bigger issue.

Also in a communist system people are often restricted to where they can go, hence they have to work at a certain location for the majority of the month, so its easier to identify people that way.