26 January 2011

Will Putin Risk a Pre-Emptive Strike on China's Megacities?


As China's population and infrastructure huddles ever closer together along the eastern rim, and concentrates into a few dense megacities, will the temptation to take out the ages-old southern enemy prove too much for Russian dictator Putin?

The demographic handwriting is on the wall. East Siberia will be ceded to China without a fight, without an invasion. Putin cannot afford to allow the wealth of his corrupt mafiacracy to slip through his fingers, but what can he do? Russians are disappearing at the same time that China is reaching out -- all over the globe -- for resources.

Energy, minerals, timber -- Siberia has it all in abundance. That wealth is the guarantor of Russia's continued existence as an empire, as a world power. The same wealth is a purloined promise to China for a future of superpowerdom.

Why is China making it easy for Russia to target its population centers and infrastructure?
"Laying the foundation year, three years paid off, five major development" is established in Yantai Hi-tech Zone Development Goals. According to the latest master plan introduced to Yantai Hi-tech Zone of the CBD as the leading technology driven, together with efforts to build high-end services, intensive with high-end manufacturing, leisure and tourism with coastal resort, riverside high-end scientific and cultural tourism zone, "as one four with "high-tech zones will hold up the layout of new industrial space; 10 km along the road on both sides of technology, planning and construction of 100 more than the roughly 30 stories about the amount of construction, building skyscrapers, modern style, the magnificent iconic urban landscape Boulevard... _NextBigFuture
Apparently the intent is toward greater industrial and commercial efficiency, and more services and conveniences closer at hand. Of course it will also mean more concentrated effluents of waste and toxic by-products of modern life, concentrated into even smaller spaces. Fortunately, most toxic and nontoxic waste can be disposed of with plasma gasification plants -- perhaps a good investment for the China to come?

China's next decade is not likely to be an unmitigated success, however. There are many things about China's real economy which even CCP economists do not understand -- much less outside western observers. Here are six predictions from one China watcher, Gordon Orr:
1. Inflation in food prices will take longer than expected to control.

Chinese consumption patterns are shifting as people become wealthier—more meat eating requires more cereals to feed the animals. The food supply chain, running at the limit, is close to breaking, and the pressures this problem creates will lead to further food quality crises. A major second- or third-tier Chinese city will see demonstrations over food price rises, unemployment, or both, on a much larger scale than anything that has occurred in recent years.

2. Middle-class bankruptcies will expand dramatically.

All that is needed for a wave of bankruptcies is further interest rate rises (targeting inflation) that result in a blip down in house prices just as mortgage payments rise. We have seen this before across major cities in Asia.

3. Minimum wages will rise, but productivity gains will outstrip labor costs. The profitability of industrial enterprises remained high at the end of 2010—indeed, higher, in many cases, than it had been a year earlier, despite the minimum-wage increases rolled out in 2010—and will probably remain high. Yet a government seeking to enhance its stature with lower-income workers will find that increasing minimum wages, perhaps by 15 to 20 percent, is an easy lever to pull.

4. China’s economic growth will be lower than expected.

5. China will step up its “invest out” program in the new five-year plan. The government may well seek to double the country’s cumulative outbound investment within the next five years.

6. The state will again try to reduce its ownership role in business. If the government relaunches its program to sell off more of its stake in companies, domestic share prices will probably decline or at least remain flat. The program will also soak up much of the liquidity currently supporting Chinese IPOs, thus reducing the ability of entrepreneurs to cash out quickly through them _from_NextBigFuture
Not particularly rosy, but not catastrophic either. But Orr was only looking at the next year, which is much safer than looking a decade or two ahead. China is leaping into a highly complex, even chaotic future, without a guidebook. China -- like Russia -- has strategic alliances, but no genuine friends on any side.

China's fate is inextricably tied to that of its northern neighbor, Russia. The relationship between the two countries has been strained for ages, and often at the brink of open war. Demographic strains and transitions affecting Russia's main source of wealth may prove the breaking point.

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Blogger Hell_Is_Like_Newark said...

If Putin did take that route, I would expect the attack to be biological in nature and not nuclear. The Soviets had some really advanced research in bio-weapons. I am sure that technology could be dusted off if the need for it should ever arise.

Thursday, 27 January, 2011  
Blogger al fin said...

Whatever strategy Putin uses will have to be devastating in nature to prevent a meaningful counterattack.

Even so, Russia's demographic picture is so bleak that it will lose Siberia sooner or later no matter what Putin chooses to do about the waves of Chinese immigrants in Eastern Siberia.

Thursday, 27 January, 2011  
Blogger Unknown said...

umm.. you guys are engaging in what Niall Ferguson likes to call 'wishful non-thinking'.

What is it with this site and China? Apocalypse this, Collapse that - there may be a small possibility of it but face it, it ain't bloody likely..


Friday, 28 January, 2011  
Blogger Steve said...

Why would China invade Siberia? The Chinese want Siberia's resources but they're going to have to pay for them one way or another. Annexing Siberia doesn't make Siberia's resources free. It just adds an additional cost so why not just continue to buy Siberia's resources from the Russians? The only reason for China to invade Siberia is if Russia stopped selling to them and why would Russia do that?

Saturday, 29 January, 2011  
Blogger al fin said...

Steve: No invasion is required. Instead, demographic factors will do the heavy lifting. Most of the groundwork has already been laid.

horosEd: No, of course not. Collapse is never likely -- until it happens. If one has not prepared for it by that time: too, too bad.

The good thing about collapse is that although it can be caused by a wide range of dynamic and chaotic factors, it is possible to make many general preparations which will serve for most types of collapse.

Saturday, 29 January, 2011  

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