For me this thread was mainly about the status of the Yuan as a reserve currency. But I never heard people predicting China's collapse in my teenage years, the exact opposite actually. I was always told they were the future. The reason people make predictions seems fairly obvious to me, they have to allocate capital and investment somewhere, and you don't like to do that in countries that are in decline. You can argue that China has survived the last 20 years and more and defied expectations.︀ That doesn't in any way mean they will continue to do so.
To some extent︁ you can predict the future, for example, when COVID hit in China it became apparent︂ in November / December that it was quite serious and anyony who bought puts on︃ SPY during January / February made a killing, even as a hedge. Option prices are︄ normally distributed, so you do not have to predict exactly what will happen, you only︅ have to profit of shifting probabilities of something happening.
There have been instances of entire︆ nations being a financial cardhouse such as Japan in the 70's, of course it is︇ very valuable to employ people that try to uncover signs of similar events happening. If︈ you say, "Ah, we can't predict it anyway", you might as well throw darts at︉ a board and base your investment of that. For all we know China is a︊ gigantic card-house. I personally don't think so, and I will be curious to see what︋ they will come up with over the next decades. There are however plenty of reasons︌ to say China has peaked, and a few missteps from the political class can worsen︍ their path significantly.
Historically China has been broken up many times, and it begs the︎ question if this will not happen again. There are also plenty of scenarios supported by️ history that would see major conflict between the US and China especially if China is on the decline:
China Is a Declining Power,and That’s the Problem. This article sums it all up pretty well, especially the part starting at "Over the past 150 years".
"All of these cases were complicated, yet the pattern is clear. If a rapid rise gives countries the means to act boldly, the fear of decline serves up a powerful motive for rasher, more urgent expansion. The same thing often happens when fast-rising powers cause their own containment by a hostile coalition. In fact, some of history’s most gruesome wars︀ have come when revisionist powers concluded their path to glory was about to be blocked."︁
Not something you would want to stake your pension on, not me at least!
"China’s rise is no mirage: Decades of growth have given Beijing the economic sinews of global︂ power. Major investments in key technologies and communications infrastructure have yielded a strong position in︃ the struggle for geoeconomic influence; China is using a multi-continent Belt and Road Initiative to︄ bring other states into its orbit.
Since the late 2000s, however, the drivers of China’s︅ rise have either stalled or turned around entirely. For example, China is running out of︆ resources: Water has become scarce, and the country is importing more energy and food than︇ any other nation, having ravaged its own natural resources. Economic growth is therefore becoming costlier:︈
According to data from DBS Bank, it takes three times as many inputs to produce︉ a unit of growth today as it did in the early 2000s.
China is also︊ approaching a demographic precipice: From 2020 to 2050, it will lose an astounding
200 million︋ working-age adults,a population the size of Nigeria,and gain 200 million senior citizens. The fiscal︌ and economic consequences will be devastating: Current projections suggest China’s medical and social security spending︍ will have to triple as a share of GDP, from 10 percent to 30 percent,︎ by 2050 just to prevent millions of seniors from dying of impoverishment and neglect."
These are facts and figures, and unless China starts cloning operations and things in the realms️ of sci-fi, they are reality. One thing we can know for certain, it won't be immigrants that will help China manage their senior citizens like in the West.
