The New World Order Is Here - Peter Zeihan - #1028

**Chris Williamson** (0:00)
America doesn't win the next era because it's brilliant. It wins because everyone else is screwed. What's that mean?

**Peter Zeihan** (0:07)
Doesn't exactly fit on a bumper sticker, but yeah, that broadly works. You got two big things that are going on. Number one, in the globalized world, it's all about who you can access safely. And in the Western Hemisphere, we really don't have to worry about any security threats from a trade point of view. So people always talk about, oh, if the US and China get into a war, won't that be bad for X, Y or Z?
I don't mean to suggest it would be a piece of cake. But the Chinese are dependent on trade and we're not. It's really that simple. And if we can nail down Canada and Mexico in a productive relationship, we used to call that NAFTA or NAFTA II, we're now having second thoughts. That's half the hard work right there. In addition, we export food, we export energy, the Chinese import both, biggest in the world in fact. And so maintaining supply chains for us is an issue of building the industrial plant. And while you can't just wave a magic wand and make that happen overnight, we've done this several times before. Every country on the planet has. Of course, we can do it again. It would just be nice if we started soon rather than later. The other piece is that the Chinese stopped having babies about 45 years ago. And they're now on the verge of running out of 50 year olds. And there is not an economic model that humans have yet to dream up that will work with where they will be demographically in less than 10 years time. So we are living in the equivalent of like 2006 subprime, where everyone's like, oh, and ah, and it's all about to go tits out.

**Chris Williamson** (1:37)
Appropriately apocalyptic from you to start. The stuff about China, is that a challenge of just geography, virome, biome, topsoil, just sort of the constitution of where they are, is that sort of one of the fundamental problems?

**Peter Zeihan** (2:01)
All of that, all of that is legitimate concerns. The river where most of them live on, the Yellow isn't navigable. They have never been able to use it for trade, so they've never internally traded among themselves. The one river they have that is navigable, the Yangtze, has always been an independent, well, I should say always, but often been an independent political entity, going back for 3,000 years of Chinese history. Down in the South, in the tropics where you've got Hong Kong, you've got city states and little enclaves of flat land that have always looked to the outside world rather than the Chinese. The soil sucks. The northern part where 70 percent of the population lives, it's Loess soil in a drought zone. If anything ever happened to logistics or distribution, what would go down in northern China would be what has gone down in northern China 27 times before, and that's civilizational collapse. If we were talking about any country that had fewer people than the Chinese have always had, that would just be the end of them. It's just that there have always been enough Chinese in the past to pick up the pieces and move forward on the other side of the break. But that requires you having children. This really is an end to the concept of China and the concept of even the Han Chinese, because we're in a situation now where we're probably, they have more people over age 54 than under. And I'm sorry, that just doesn't work. And very soon it will be over. That's before you consider the broader geography of China versus the rest of the world. You got the first island chain off the coast, so the Chinese have never ever ever been able to be a global commercial power, except when the United States, when it created the global system, told everybody that they couldn't bring guns to trade talks. And that one decision that we made allowed the Chinese to play on the global field in a way that they just never could until that point. And so lo and behold, this is the one era of Chinese history where they're unified and successful.

**Chris Williamson** (3:58)
Tell me more about the guns to the meetings rule and how that helped.

**Peter Zeihan** (4:04)
Sure. So before World War II, that's a good break. We basically had an imperial system where if you wanted links to the resources and markets and populations that were outside of your home country, you had to build a Navy and you went and took it. You built your empire and those empires attempted to not trade with one another if they could help it. They just traded within their own network. That model generated what we like to call history and it led to World War II, when all the empires crashed and burned at the same time fighting for dominance. Well, at the end of World War II, the only Navy that was left that was worthy of the name was the American Navy. We had never been a trading power because we more or less had a continent to ourselves and we're still digesting the continent. We had this idea that we will use our Navy to protect everyone, and we will allow everyone to trade with anyone else, and we will allow our market to be open to your goods if, in exchange, we get to write your security policies, so we don't get another conflict like this again. And so one of the things that people want to break down the trade relationships and say that it's unfair for the United States, what they forget is it was supposed to be unfair to the United States. From an economic point of view, we bribed up an alliance. And if you remember your history, it wasn't just Britain and Germany and Japan and Korea and Taiwan and Italy that were allies during the Cold War. It was China too, because it was all about boxing in the Soviets, and it worked beautifully.