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#chinastumbles Let us go back to almost 40 years ago. Japan was truly at "the height of its glory." Japanese cars were making it look like Detroit and US automakers would go out of business. Japanese consumer electronics and cameras were putting US and German-made products to shame. Japanese companies were booming and making massive acquisitions in the US. As the US budget deficit shot upward with massive defense expenditures by the late President Ronald Reagan, Japanese investors were buying up massive amounts of US debt. Serious academic think tanks issued detailed studies warning us all that Japan was set to overtake the US and become the most powerful economy and nation in the world. US television shows predicted that the University of Tokyo would soon eclipse US universities and become the number one academic center in the world.
As the old saying goes, before Japan could score this "final game-winning touchdown," they figuratively "fell flat on their faces." In the book and movie "The War Of The Worlds," an invincible invading fleet of technologically superior Martians was defeated by the microbes we have here on earth. Japan was defeated by an aging population and a huge budget deficit that easily exceeds 200% of GDP.
Let us fast forward to the last three or four years. China became "the ten-foot-tall giant." They have had economic growth that no country could rival. They have moved to become the most powerful manufacturing center on earth. Their Navy now rivals the US Navy. Chinese imports have come to dominate US society. The same learned think tanks predicting that Japan would overtake the US economy in the decade of the 1980s are now saying that China's economy would overtake the US economy sometime between 2024 and 2027.
What is unfolding now is a repeat of Japan's meteoric rise to power. China's population has stopped growing. There are now more old people than young workers. There is another demographic problem that I pointed out to Elena yesterday afternoon. With prosperity, the Chinese population is eating much better and starting to enjoy the good life. China is afflicted with over 300 million obese people with chronic diseases like diabetes, heart disease, etc. The Chinese healthcare system is not prepared to serve all these sick people.
Now Covid-19 has hit the Chines population with a vengeance. China publicly admitted to 60,000 deaths in the last month or so. One major and serious US Covid-19 expert speculated that the actual figure is in the range of 600,000. Matters now get worse. We have the Chinese New Year's Celebration. This is a time of vacation and holidays. Over a billion people will be traveling. The number of Covid-19 infections and deaths that will follow is unimaginable and terrifying. One close Chinese friend here in the Bay area with relatives back in mainland China made the comment: "Everyone is infected." One of her aunts had already died of Covid-19.