Demography is the key to our geopolitical future

We live in interesting times.

World fertility continues an unprecedented long-term decline with no end in sight. Even in high-fertility sub-Saharan Africa, rates are remarkably declining.

The largest mass migrations in history persist.

A changing world order is upon us. The US-led unipolar world is morphing into a multipolar one. We’re in the early stages, but the handwriting is on the wall. It will be a bumpy ride. 

Demography defines geopolitics. Always has. 

Consider the perpetual “Great Game” in world affairs. The term originated with 19th century Russian-British rough-and-tumble in central Asia. In those days large families were the norm, providing a steady supply of soldiers. The only consequential world powers were Western.

Today’s Great Game is a much-higher-stakes gambit. An emerging China-led economic colossus threatens to utterly upend the post-World War II status quo.  

How so? After World War II, Europe was ruled from without. Washington and Moscow called the shots. Soviet Communism had no private sector. American industry had no real competition. Under American dominion, the “free West” became the world’s economic engine with the almighty dollar as world reserve currency. Talk about power.

But nothing lasts forever.

Insatiable pursuit of profit led the US to deindustrialize, outsourcing manufacturing to Asia. Why? Asia had lots of people, thus a surplus of labour--cheap labour. Outsourcing was a win-win for China and for big business. While the US was being hollowed out, China prospered and corporate profits surged. Short-sighted? Not for those who got rich.

To keep domestic labour cheap, Western regimes imposed a mammoth social engineering scheme, opening national borders for the first time to the mass immigration of non-Western people. The cheap labour lobby branded it “diversity.”

While all this was unfolding, the USSR collapsed. The Cold War was kaput. America was the sole global superpower. What could go wrong?

Plenty. China got rich and became a superpower. Russia resurrected itself. Europe’s economy took off. So did India’s development.

With China’s money, Russia’s resources, Europe’s market and India’s growth, a powerful Eurasian economic bloc began to congeal. Such a transcontinental trading behemoth has the potential – the market, technology and population – to eclipse US influence, relegating Uncle Sam to second-fiddle superpower status.

But here’s the rub. China’s working-age (15-64) population shrinks by millions each year. According to demographer Huang Wenzheng in China’s Global Times:

It can be predicted that China's birth rate will continue to shrink for more than a century and the birth rate in first-tier cities will continue to fall. The third-child policy may alleviate some of the problems, but it is unlikely to reverse the trend in the short term.

Japan’s working-age cohort has fallen 17 percent just since 1994. Taiwan’s began to shrink in 2016, South Korea’ in 2017. These industrial powerhouses have the world’s lowest fertility. Their populations are shrinking. Bottom line: East Asia is losing its economic mojo. Not enough workers.

This affects the Great Game (China & friends vs. US & friends):

[China’s working age] cohort will start declining rapidly in the 2030s, and shrink by almost two-thirds by the end of the century. With the US working-age population projected to be about the same size in 2100 as it is now, China’s will go from more than four times larger to less than twice as big. Throw in Canada and Mexico, which aren’t exactly part of the same labour market as the US but do share a free-trade zone, and China’s working-age population is projected to be only 1.2 times bigger.

So the US remains competitive? Of course. But by 2050 India will have 1.1 billion working-age people, 25 percent more than China.

Then there is Muslim Asia, plagued by tribalism and religious strife with sadly subpar education. Given current trends, in 2050 there will be more working-age Asian Muslims than working-age people in China and India combined. Tomorrow’s Eurasian bloc labour force?

China is heavily invested in Pakistan and has every incentive to resolve tensions with its 13 million Muslim Uighurs, who are strategically situated vis-à-vis India and the whole of western Asia. Russia will be nearly 30 percent Muslim by 2030. They have more children.

China and India have not been friends but have considerable mutual interests. Russia is brokering better Sino-Indian relations. Both countries are huge customers of Russian energy and raw materials. China has the cash, technology and manufacturing base. India has the labour and economy suitable for a superpower partner.

Meanwhile, Europe had been fully on board, maximizing output with cheap Russian energy and becoming a critical player in a rising Eurasia. Then came Russia’s Ukraine incursion, escalating an eight-year war. Europe reflexively sanctioned Russia with no Plan B. That broke up the nascent Eurasian trading bloc, a win for the US. The rest of Eurasia stuck with Russia. And a bleak winter without Russian oil and gas is on the horizon for Europe, which is now more dependent than ever on the US. That will not last.

Of all the groups mentioned above, it is the largely impoverished and poorly educated Asian Muslims with the highest fertility. Throughout the Global North and also in India, rising standards of living have altered social priorities. Mammon comes before family. Chickens come home to roost. 

History is full of “what ifs?” Had the West maintained replacement fertility, would there have been much less cheap-labour immigration, thereby preserving social cohesion, sparing us spiralling costs and mind-blowing cultural strife? Had China done the same, would there be no mad scramble for Indian and Muslim labour? Would Eurasian economic integration have ever begun?

Of course we’ll never know. But one thing is certain. Demography is the driving force behind it all.


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