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Hypothetical situation:
The USA does not recover from its current recession, but instead spirals down into a depression. Personal debt catches up with the consumer, leading to a big slowdown in domestic demand. Further, the government is in no position to stimulate the economy, as Medicare, Medicaid, and SS all are hit simultaneously by the baby boomer retirement bulge (around 2009-2010).
Simultaneously, peak oil (or a mild version thereof) hits, and the cost of shipping begins to eat into the costs of both the personal commuter and the international shipper.
The effect this has on China is that their exports are hit very, very badly. Given that a very large part of Chinese growth has been export based, this will hit them hard, and where it hurts. The effects of peak oil will be that even if the USA recovers from the depression in the next few years, it will be impossible to go back to the old ways of outsourcing manufacturing to China, as the costs of transport will be too high.
Chinese domestic growth will also be severely hit, as oil is the lubricant of all industrial economies today.
To add to this, there are some troubling statistics on the "floating population" of China - the people, of varied (often rural) origins - who are drifting from place to place, city to city, looking for a job. The official figure of the Chinese government says that there are 110 million such people.
Further, there has been massive migration from the villages to the cities, and a shift from a rural-agrarian style of living to an urban-industrial one. These are people who will be very, very unhappy if they're forced back into the old life - and it is not known if there will even be an old life to go back to, if the depression is severe enough.
So the question, then, becomes: Can China survive a depression coupled with a simultaneous deglobalisation? And if it cannot, what effects does this have on the rest of us?
The USA does not recover from its current recession, but instead spirals down into a depression. Personal debt catches up with the consumer, leading to a big slowdown in domestic demand. Further, the government is in no position to stimulate the economy, as Medicare, Medicaid, and SS all are hit simultaneously by the baby boomer retirement bulge (around 2009-2010).
Simultaneously, peak oil (or a mild version thereof) hits, and the cost of shipping begins to eat into the costs of both the personal commuter and the international shipper.
The effect this has on China is that their exports are hit very, very badly. Given that a very large part of Chinese growth has been export based, this will hit them hard, and where it hurts. The effects of peak oil will be that even if the USA recovers from the depression in the next few years, it will be impossible to go back to the old ways of outsourcing manufacturing to China, as the costs of transport will be too high.
Chinese domestic growth will also be severely hit, as oil is the lubricant of all industrial economies today.
To add to this, there are some troubling statistics on the "floating population" of China - the people, of varied (often rural) origins - who are drifting from place to place, city to city, looking for a job. The official figure of the Chinese government says that there are 110 million such people.
Further, there has been massive migration from the villages to the cities, and a shift from a rural-agrarian style of living to an urban-industrial one. These are people who will be very, very unhappy if they're forced back into the old life - and it is not known if there will even be an old life to go back to, if the depression is severe enough.
So the question, then, becomes: Can China survive a depression coupled with a simultaneous deglobalisation? And if it cannot, what effects does this have on the rest of us?
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