In the episode, released Saturday on YouTube, Shapiro explains how China has major demographic, economic, and political problems that will prevent it from emerging as the world’s preeminent power.
“The real story of China is far, far scarier because China is a power in a state of inevitable collapse. The only question is when and how much damage they’ll do before the Chinese regime implodes,” Shapiro said.
The first problem, Shapiro explained, is that China is becoming an increasingly elderly population due in part to its longtime one-child policy, which led to mass abortion and infanticide targeting girls. Although China reversed its one-child policy in recent years, it was too late to reverse the demographic trends.
The second problem discussed is a lack of innovation in China. Shapiro said that innovation could help China survive its demographic collapse, but that its political structures prevent this from happening.
“But China has no innovation thanks to its state-controlled mercantilist schemes. Right now, the entire Chinese economy is reliant on producing things at scale, undercutting foreign markets, and stealing technology. As the young working population declines producing things, that scale becomes a lot more difficult. Cheap labor goes away. China is trying to fill the gap right now with robotics,” Shapiro said.
In addition to relying on cheap labor, China has also built its economy through IP theft, something which Western nations have begun to crack down on.
The third problem facing China, Shapiro noted, is its national debt, having fueled its economic growth with debts.
“The best visible example of Chinese economic hollowness is its ghost cities — literally cities that are just empty. China is chock-filled with these so-called ghost cities,” Shapiro said. He explained that China had borrowed “insane” amounts of money for government-created apartments and then directed people to invest their retirement money into them, leading to the creation of an unnecessary housing supply.
A fourth problem facing China is its military, with it still lagging behind the U.S. in terms of technological capability and ability to project water power. The Daily Wire co-founder explained that the American defense industry was able to produce far superior technology while China’s economic and political environment stifled innovation.
Finally, China is severely hampered in its ability to adapt to social and economic problems because it is run by a one-party dictatorship, Shapiro said.
“China is in very serious trouble. Does this mean that China is going to break apart into a million polities? No. But it means that the current regime is on shaky footing, and that means they are likely to get very aggressive in the near term in an attempt to shore up their foundation, because if they don’t, that collapse is going to happen sooner rather than later,” Shapiro concluded.