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Zeihan is wrong, China is strong Truth is the most important thing. You first figure out what's true, and then you allocate resources on that basis. That's why I'm a reality shill. On that topic, my colleague Nic Carter believes Peter Zeihan is correct in his worldview, and says he hasn't seen a cogent counterargument. So, let's give that counterargument. First off: I fully grant that Zeihan is an interesting thinker who has books you should check out. I have nothing against the man personally, I just disagree with his thesis, which one might summarize as follows: ZEIHAN (paraphrased): The post-WWII era of globalized trade was a temporary American strategic bribe to fight the Cold War. With the US now permanently retreating to its own hemisphere, that global "Order" is rapidly collapsing. As the US Navy stops guaranteeing safe transport, nations dependent on imported food, energy, and distant markets will see their supply chains shatter. This crisis will be fatally compounded by the terminal demographic aging of powers like China, Russia, and Germany. As the rest of the world fractures into regional conflicts and faces widespread deindustrialization and famine, North America will remain secure. Blessed with unparalleled geography, complete resource independence, and a localized supply chain through Mexico, the US is entering a massive re-industrialization boom as an isolated, unmatched superpower. Let us acknowledge that certain aspects of this seem similar to what's going on. Aren't supply chains breaking up? Isn't energy being cut off? Isn't the US Navy pulling back from protecting sea lanes? And isn't China aging? Yes. However, while Zeihan identifies many of the right axes of geopolitical confrontation (like the US/China rivalry, maritime blockades, the fertility crisis, and manufacturing strength), he gets the causes wrong, the signs wrong, and the ultimate outcome wrong, because a declining US is on the losing side of all these battles. Let's first understand the big picture, then the American and Chinese situations, and finally go point by point on Zeihan's thesis. The Big Picture: The World Economy is Now Eurasian This is perhaps the single most important graph in the world. It shows the trajectory of billions of people and trillions of dollars across more than a thousand years. What it shows is that the center-of-mass of the world economy used to be in roughly the center of Eurasia. That is, if you averaged together the economies of China, India, Japan, the Middle East, and Europe, you'd roughly see something in the middle of the Eurasian supercontinent. Which makes sense, because for much of history there was rough military and economic parity across Eurasia. That's why the Huns and Mongols could invade Europe, why Marco Polo sought out China, why Columbus risked his life to get to India, and how the Arabs could conquer Andalusia. Then, with the advent of the Renaissance and the Industrial Revolution, everything changed. The world economy rocketed out to Europe, which then fought two world wars with all its new technology. And so by 1950, after beating each others' brains out, the center of the world economy was dominated by the USA and in the North Atlantic rather than the center of Eurasia. Because in 1950, the US was the largest region of the world that wasn't under communism (like Russia and China), or socialism (like Eastern Europe), or literally nuked (like Japan). So the US set up the rules-based order, with the UN, World Bank, IMF, and all that stuff. The folk intuition is right: peak America was indeed 1950. But since that time, the West's GDP-PPP adjusted share of the world economy has fallen. Gradually at first, and then suddenly after the fall of communism in 1991, the world economy started returning back to its organic state: After 1991, Russia and Eastern Europe were no longer communist, India became liberalized, and China accelerated its move to capitalism. Since that point, the RIC of BRICS (Russia, India, and China) have become respectively the #4, #3, and #1 economies globally by GDP-PPP: I mean, this makes sense! If you take the long lens on history, the current level of Western dominance (let alone the 1950s level) is extremely unusual: And that now brings us to the present day. (2) Red and Blue America are in Decline Obviously, America is in relative decline. The US is completely schizo on this, sometimes admitting it and sometimes angrily denying it, but take it from Trump's own campaign in 2024: American decline is the whole point of "Make America Great Again", and actually "Build Back Better" too. They are Red MAGA and Blue MAGA. Both slogans imply that the present is worse than the past, that they've been disrupted and are in decline. And they're right! Here's what happened to the Republicans, who were disrupted by China: Separately, the Democrats were disrupted by the Internet: These twin economic disruptions have exacerbated the pre-existing Democrat-vs-Republican political polarization, which is already at Civil War levels: The feeling (and fact) of Republican decline at the hands of China is partly what gave rise to the Trump campaign in 2015. Recall that a big part of Trump's rise was Chyna, Chyna, Chyna. He channeled the rage of the economically disrupted Red American, who'd been outcompeted by China in their core competencies of manufacturing and military strength. And he vowed to hit China with the trade war, and get those jobs back. But it didn't work. (3) China won the trade war The simplest way to show that the trade war Trump started in 2017 (and that Biden continued after 2021) didn't work is to look at China's global trade numbers by 2024: The Chinese domestic economy is similarly completely dominant. Hit play on the following short video, and you'll see that China is #1 in steel, electricity, cars, nuclear plants under construction, rail, ships, drones, cement, rare earths, solar, and more: What hasn't China dominated yet? It is true there are at least three major categories where China isn't completely dominant in yet: planes, chips, and AI. But China is fast coming up on planes, via the COMAC C919, which they're bootstrapping in their domestic market: And the entire Biden campaign to stop China's chip development has also not fully succeeded, as China now has two vendors at 7nm domestically. Moreover, China's open-weight AI models have actually gained more downloads than US models: And while China may be one step behind in digital AI, it is now ahead in physical AI, namely robots, particularly humanoid robots: Finally, even after Trump's last-ditch desperate 2025 redoubling of the trade war, China shrugged it off. They inked a huge trade deal with Canada, flipping one of the last holdouts into the Chinese camp, and just massively increased all their exports to Europe: And while the US is abandoning free trade, China is embracing it: Even the US military is now made in China! In the most literal sense, the suppliers for the Tomahawks and JDAMs are made in China, according to this $400m Pentagon-commissioned report. Perhaps the most obvious demonstration of China's capabilities are its glowing megacities. And yes, it's not just that "they put LEDs on their buildings", but that (a) all those buildings were built from scratch in the last few decades at rapid speed and (b) in America, such lights would be quickly stolen by copper thieves. (4) Why Zeihan is Wrong OK. Now that you've seen that (a) the world economy is already Eurasian, and (b) both Blue and Red America are in decline, while (c) China is in ascent, we're now ready to address Zeihan. At a high level, these charts show that Zeihan's worldview is fundamentally incorrect, because America is declining (as both Trump and NYT have admitted) while China is rising (as the numbers show). Yes, Zeihan is right that America is retreating from the world...but it's being driven back, while lighting things on fire as it retreats. Meanwhile, China is expanding into the vacuum. Now let's go point-by-point. Point 1: China has the ability and incentives to defend its shipping lanes Let's start with this major Zeihan point, which is that the world is screwed once America abandons the shipping lanes: ZEIHAN (paraphrased): The post-WWII era of globalized trade was a temporary American strategic bribe to fight the Cold War. With the US now permanently retreating to its own hemisphere, that global "Order" is rapidly collapsing. As the US Navy stops guaranteeing safe transport, nations dependent on imported food, energy, and distant markets will see their supply chains shatter. COUNTERARGUMENT: There will absolutely be stress, and supply chains will break for a time, but (a) this is due to America's inability to defend shipping lanes like the Red Sea and Strait of Hormuz and (b) its anarchist willingness to light trade relationships on fire, not (c) its principled withdrawal from the theater. Moreover, (d) those lanes will ultimately reorganize around China. Why? Recall first that China is the world's largest exporter, with goods in every port: Recall also that China now has the world's largest navy: China also has the most shipbuilding capacity in the world: And the secretary of the US Navy even admitted that one Chinese shipyard has more capacity than all US shipyards combined: So China already has the latent naval power to guard all the sealanes, perhaps even with drone ships. Why doesn't it flex it? Well, only after the British Empire was clearly in freefall did America step up to take on global hegemony. Prior to that point, the US was fully aware of how expensive becoming a global empire would be, and sought to avoid the responsibility. But as the book Tomorrow the World documents, the US realized in 1940 after the Fall of France that it had to step up in the British Empire's place, or else the Nazis/Soviets would run the world. One thesis is: China is just waiting till it absolutely has to bear the expense of empire. China is already emerging as the Schelling Point Today, a declining America is (whether consciously or not) setting fire to the entire world to try to maintain relative dominance, including fighting the Russians to the last Ukrainian (and European), and pushing the entire Middle East into a giant war with Iran. This is the massively negative-sum "Trashcanistan" strategy, or what I call American Anarchy: Leave aside for a second the morality of destroying the rest of the world to maintain America's relative place in it. If that plan were pursued, China clearly has the shipbuilding and military capacity to defend its own trade routes from anything like Trashcanistan. It's done that on a small scale in the naval arena in the Gulf of Aden. More interestingly, China has successfully defended its interests against chaos in the whole Russia/Ukraine debacle, turning Russia's need for Chinese goods into a huge Chinese win. Finally, we are seeing signs that China may take on the role of shipping lanes guardian as the US retreats from the world and sets fire to it, if only to guard its own interests. Because right now, as the joke goes, every ship going through the Strait of Hormuz wants to flag itself as "Chinese" (as opposed to, say, Bolivian) because they know no one wants to fire on a Chinese ship, and because Chinese ships currently gain safe passage. Indeed, that's why this is already a meme: Just this alone is a single image rebuttal of the Zeihan thesis that only America can or will defend global shipping. Yes, America is seemingly trying to blow up global trade on its way out as hegemon, what with the Russia/Ukraine war, the tariffs, and now this disastrous Iran war. But it is in China's economic interest to defend inbound and outbound shipping to China, which constitutes most of global trade, and so they will likely do it. It might mean all ships must be operated by (or at least co-owned by) the Chinese, which suits them fine. Point 2: China's Demographics are better than America's Demographics Zeihan talks a lot about China's demographics, and how they're going to get old before they get rich, and won't be around, and so on. To paraphrase: ZEIHAN (paraphrased): This crisis will be fatally compounded by the terminal demographic aging of powers like China COUNTERARGUMENT: the only thing the US has going for it demographically is having a higher percentage of young people. Aside from that, far too many Americans are drug-addicted, fatherless, on disability, socially isolated, politically radicalized, ethnically riven, and generally distrustful of each other. China doesn't have those issues. Moreover, Chinese aging isn't going to be some deus ex machina that saves the US, because (a) China's demographic problems have robotic solutions and (b) China is throwing the kitchen sink at fertility issues. Even if China's population does hugely decline (and fertility rates vary across a population so that's not certain), you'd rather have 800M older people + 600M robots in a high-trust society than 330M heavily armed young people in a low-trust society. We haven't even gotten to crime, homelessness, mental illness, attitudes towards work, and a million other variables. Or the fact that the (ethnically different) American young are expected to pay the Social Security for older, more Caucasian boomers. Basically, modern American demographics are far worse than China's on every axis other than mere youth. (Oh, also: mere quantity of youth doesn't matter, because many countries have big young populations without being economically important.) Point 3: North America will not remain secure Here's the last part of Zeihan's thesis: ZEIHAN (paraphrased): As the rest of the world fractures into regional conflicts and faces widespread deindustrialization and famine, North America will remain secure. Blessed with unparalleled geography, complete resource independence, and a localized supply chain through Mexico, the US is entering a massive re-industrialization boom as an isolated, unmatched superpower. COUNTERARGUMENT: I think this is completely wrong, for several reasons. First, America is so deeply polarized that it's on the verge of hot civil war. Democrats are shooting Republicans from 200 yards and cheering for the murders, while Republicans and Democrats are getting into fatal confrontations. There are countless books and articles on this from both left and right, but here are a few. The point being that "America" doesn't exist anymore than "Korea" exists. There is no America, only Blue America and Red America. Just like there is no Korea, only North Korea and South Korea. Second, geography is actually downstream of political leadership. That is: terrible political leadership at the end of the Soviet Union resulted in the breakup into Russia and a dozen other states. Similarly, the terrible political leadership and domestic polarization of America is already leading to soft secession and will likely lead to physical breakup. The threats to invade Greenland and Canada have resulted in Canada already siding with China. Canada is adjacent to the blue states that are most disaligned with MAGA, and given the hard borders and interstate compacts that arose during COVID, we should not assume the United States will remain "United". Third, the Mississippi River won't save you from a sovereign debt crisis. America's $175T+ in compounding debt isn't going to be solved by selling some coal and lumber. Do the math: it can't be paid and will result in sovereign default. Fourth, the US isn't "resource independent", because its business model is highly dependent on dollar inflation as global taxation. It will face an enormous collapse in living standards when it withdraws from the world and its tax base for money printing disappears. If the ~$6T printed since 2020 was spread across just 330M Americans rather than 8B+ globally, you'd go from printing <$1k/head to almost $20k/head. And purchasing power would drop accordingly. The natural resources will then just get auctioned as commodities, just as they were after the Soviet collapse, assuming there's sufficient rule-of-law to permit that. Fifth, the US isn't really moving towards "re-industrialization", because it's simply not numerical about anything it's doing. US exports are just not cost-competitive with Chinese exports in neutral markets like Uruguay or Hungary. The Trump tariffs were a blunderbuss instrument that blocked the importation of raw materials and machine tools. Smart deregulation might have helped, as would import substitution, but that's not being systematically pursued. The US isn't even a net food exporter anymore: Sixth, "isolation" didn't make the US a superpower. Diplomacy did, and trade relationships did. The entire point of the British Empire and the American Empire was that the world was its market! Finally, the very fact that the US has to retreat into its own continent is an admission of defeat, an admission that the US can no longer bear the burden of empire. Why would you give up your empire and go home unless you were no longer dominant? Indeed, before this war in Iran, the administration actually admitted that imperial withdrawal was not simply a matter of "lack of willingness" but also driven by a lack of ability: Ultimately, Zeihan provides a rationalization for why the collapse of American empire (and the accompanied spiteful trashing of the countries that once naively trusted the US, like Europeans and Canadians) is actually some 4D chess move that results in a super-duper powerful isolated America while the rest of the world burns. But if America really is in decline, and if it hurts everyone in the world who trusted it while it's on the way down, but it doesn't actually finish them...well, that's neither a wise nor a moral strategy, and it's not going to turn out well, and it's definitely not going to result in the win for America and loss for China that Zeihan expects. Just look at the scoreboard: PS: I didn't even get into all the other things that aren't included in the Zeihan thesis, particularly the importance of networks and tech and so on. Geopolitics is only one lens on the world; technopolitics (the politics of the cloud) is co-equal at this point, as social media, AI, drones, and online price tickers are what much of the fighting is about. PSS: Personally, I think there are much better ways to preserve American values than angrily fighting everyone amidst a relative decline that's actually a return to global normality. I think that better way begins with the Internet, which is the successor to America as America was to Britain. Because it's the only thing with global economic scale comparable to China, I do believe the Internet could, in the fullness of time, grow to balance (not beat) China. We can print out social networks into startup cities, materializing the cloud upon the land. But that's a story for another day. Btw, I do give @PeterZeihan credit for talking about axes that few were considering 10+ years ago. Those constants like shipping lanes did become variables. I mainly disagree with the sign of his conclusions, in terms of what he expects to rise and fall. https://t.co/FuCssBNKkT