Professional western economists are united in the idea that all developing and/or "centrally controlled" countries must ultimately "democratize" in order to achieve domestic economic growth.

 

If this belief applies to China, what we want to know is as follows: "Is democratization happening, will it happen, or will China be a special case?"

 

We pretty much do know that China's "export workshop of the world" approach is weakening, and that the economy is slowing down from its long burst of plus10 percent annual gains in its GDP. We really don't know whether such figures mean much--at least to our narrow focus on meat consumption and soybean imports--and we have great difficulty "reading" what's going on in China's political and economic theatre.

 

The chart below is an oversimplification of the current "split" between the President (Xi) and the Premier (Li) of China. If the main international newspapers are right, the President (Xi) seems to be winning--and what he appears to want is a return to absolute central control, including shutting down freedom of the press and the internet. (I say good luck on that last idea, I think that the internet CANNOT be shut down by anyone, let alone the China President (Xi)--or the US Democratic National Committee, or anyone else in power. In fact, we are just this week waking up to how much the internet, with respect to politics, is the real "elephant in the room" for all of us!)

 

I'll turn next week to China's cultural habit of "building Great Walls" (including the old Great Stone Wall, the new Great Sea Wall in the South China Sea and the new Great Firewall vs. the Internet), but let me mention another problem that the Xi-Li "control team" faces, and that many clients have emailed me about, namely the relentless aging of China's population.

 

The second chart below shows the demographic shift toward this population shift faced by China, which means not only a likely decrease in per capita meat and vegetable oil use, but also a need for vast new sums of government spending to care for the elderly--or to face equally vast civil disorder.

 

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