The Diaper Effect: Why Is War with China Inevitable?*

The next great war may be propelled not by a sense of strength, but of weakness – both of oneself and of a potential rival. China is getting closer to this point.

It’s happened. Next year – for the first time in history – manufacturers of hygiene products will release on the Chinese market more diapers for adults than for infants. This, of course, has to do with the revolution that demographers have been talking about for years, and which is likely to take place in 2022: The world’s largest society will begin to shrink and as many as 365 million Chinese will die by 2050. According to a report by CLSA, one of the world’s largest investment groups, the Chinese adult diaper market, worth less than $1 billion today, will grow by a factor of 16 in eight years.

The shift will be dramatic in many ways. According to another bank report, by Natixis, in 30 years one in four Chinese people will be elderly (65+ years), compared with one in 10 in 2020. Banks are very interested in this revolution because they see it as an enormous investment opportunity, from the hygiene product business, care agencies, nursing homes and funeral homes, to cemetery services. Last year, for the first time in history, more than 10 million Chinese died, and the average price of a burial plot in Beijing cemeteries exceeded the equivalent of 50,000 złoty (around $12,500).

Does all of this mean there will be a war? In 1960, the American mathematician and meteorologist Edward Lorenz tried to predict the weather. And he came to the not so surprising conclusion that we are limited in how far out we can forecast it – several days at most. Lorenz called this singularity a “sensitivity to initial conditions,” but it’s more widely known as the “butterfly effect” – a seemingly unrelated circumstance that could have a fundamental impact on the future.

It is the “butterfly effect,” or rather the “diaper effect” that the authors of one of the most interesting books of the past year refers to. In “Into the Danger Zone: The Coming Crisis in US- China Relations,” Michael Beckley from Tufts University and Hal Brands from John Hopkins University argue that China’s demographic collapse, which stems from general social modernization, but above all, its radical birth control policy, will be the greatest challenge to world stability in the coming years.

1.

In recent months, one could see that Joe Biden’s America has been withdrawing from its role as a guarantor of the international liberal order. And successive authoritarian regimes are currently testing just how far that retreat will go. Russia is gathering troops near Ukraine and provoking new crises on its borders. China is getting bolder in its actions against Taiwan while testing supersonic weapons on large models of American aircraft carriers. Iran, under its new leadership, has imposed a set of prohibitive conditions for a return to the 2015 international nuclear deal and is likely using that time to build a nuclear bomb.

At the same time, the U.S. exerts less and less power in international politics and, indeed, is retreating, as symbolized by Afghanistan. Such global self-limitation in Washington is supported by both foreign policy doves and hawks. The former argue that the U.S., trying to play the role of a global policeman, has allowed itself to be drawn into unwinnable wars. The hawks, in turn, claim that withdrawing from the wider world is crucial to focus on what’s most important – the impending conflict with China.

Therefore, both factions, from different positions, come to the same conclusion. And this, on the one hand, starts to worry allies, and on the other, provokes rivals. “According to the Chinese, Biden is a very weak president and will continue to weaken,” said Anthony Cordesman at the Center for Strategic and International Studies. “Chinese diplomats talk about it almost openly. Just like the Russian ones.”** Cordesman further notes, however, that China and Russia may be mistaken here.

In 1950, the Soviet Union and its North Korean ally miscalculated when U.S. Secretary of State Dean Acheson did not include South Korea among America’s “defensive perimeter” in Asia, culminating in a bloody war, in which Washington refused to give up. Similarly, in 1990, the U.S. ambassador to Iraq told Saddam Hussein that the U.S. had “no opinion on the Arab-Arab conflicts.” Saddam saw this as a sign of weakness and lack of interest and attacked Kuwait, with fatal results.

Robert Kagan, a famous American political scientist and one of the leading neoconservatives, writes about this masterfully in his 2007 book “Dangerous Nation.” In his opinion, the U.S. might interfere in unnecessary conflicts too often and suffer as a consequence. But its potential rivals may make a fatal mistake and confuse America’s passing “geopolitical slumber”** with the alleged triumph of American isolationism. President Biden is certainly not a typical foreign policy hawk, but he will gladly become one if it turns out that Americans themselves will demand blood, as happened after 9/11.

It’s worth remembering that Washington still has stronger armed forces than China or Russia, and that American soldiers surpass potential rivals in experience – no other country has participated in so many conflicts. Compared to other democracies, the U.S. is still Kagan’s “war society,”** a dangerous nation.

2.

America’s situation today, however, is in many ways unprecedented. There was a “coordinated global assault by revisionist powers,” as Gideon Rachman recently wrote in Financial Times. It is difficult to talk of a formal alliance between Russia, China, and Iran. But – as Rachman puts it – “while there is no single plan linking the ambitions of Beijing, Moscow, and Tehran, there is a degree of shared analysis and watchfulness.”

All three regimes regularly sound the alarm that Washington wishes to overthrow them. All three have superpower plans for their regions, corresponding to their positions. Further, all of them emphasize the “unbreakable” ties with the people in neighboring countries - and the need to defend their interests. China wants to free the Chinese “imprisoned” by the Taiwanese regime. Vladimir Putin roars about the “genocide” that Ukraine committed against its Russian-speaking citizens. And Tehran wants to defend Shiites throughout the Middle East, even against their will.

The situation is also unique in that Moscow and Beijing have kept their distance for decades. But today, as the old world order collapses, the two powers have reached a common interest in limiting American influence and economic prosperity. They are increasingly performing joint military exercises, most recently in the Sea of Japan in October. Russian and Chinese military aircraft regularly violate South Korea’s airspace. In recent years, the Russians have broken records in exporting military equipment to China.

Both of these countries do not need a formal alliance to limit American influence. It is sufficient if they simultaneously lead to two unrelated conflicts on opposite ends of the world. “Any crisis caused by Vladimir Putin around Ukrainian borders works to the benefit of Xi Jinping, who wants to ‘reclaim’ Taiwan - because it distracts American attention from there. It works both ways: If Chinese troops start firing again on the border with India, Putin may consider it a good time to attack Ukraine,” said A. Wess Mitchell, who served as assistant secretary of state for European and Eurasian affairs. “I’m afraid we’re only missing a flashpoint.”**

3.

And here we come back to the “diaper effect.” Until the first decade of the 21st century, China was basically self-sufficient in terms of food production, energy and water. It also had an excellent ratio of working-age citizens to retirees – 10-to-1 (in the West it is 5-to-1). At the beginning of the century and with the admission of China to the World Trade Organization, foreign markets were opened to China. America was under the illusion that including China in international economic structures would ensure eternal global peace.

But for the last 20 years or so, all of these factors have been looking increasingly worse for China. The country is no longer self-sufficient in terms of food, energy and water – instead, it has become the largest importer of raw materials in the world. As Beckley and Brands note in “Into the Danger Zone,” citing DBS Bank Ltd. analysis data, today it is three times more expensive to produce a statistical unit of value in China than at the beginning of the century. Above all, however, this country will experience a demographic tsunami in the upcoming years.

In macroeconomics, for years it has been famously said that “demography is destiny.” The idea is simple: If your economy can count on a steady supply of new workforce – be it domestic or imported – then there’s nothing to worry about. Consumption, investments, and tax revenues will remain at the appropriate level. And vice versa: If the economy lacks people of working age, it will face serious problems - not only lower gross domestic product growth or financial crises but most of all, the collapse of the pension system, as fewer working people will have to support more of the unemployed.

According to the United Nations, China will lose 200 million citizens by 2050, which is the population of Nigeria today. The WHO forecasts that Beijing will have to increase its health care and social security spending from the current 10% of GDP to 30% to save its rapidly growing army of seniors from starvation and disease. But it’s also worth looking at the forecasts of investment banks that risk their own money. Simon Powell, a big data guru who works for Jefferies Financial Group, believes that the U.N. forecast is no longer up to date and China will see its population peak as early as 2022, with deaths surpassing births by 6 million in three years.

At the same time, for ideological reasons, the authorities are gradually dismantling the engine that has given China decades of rapid development – a liberalized economy. In accordance with government regulations, capital is increasingly flowing from a thriving private sector to big-state-owned zombie enterprises – such as the recent bankrupt Evergrande Group developer – where political factors take precedence over economic factors. All of this is coated with President Xi’s infallibility and drowned out by a massive anti-corruption campaign used to eliminate political opponents.

The results are already clearly visible in the numbers. In the bestseller, “Red Capitalism: The Fragile Financial Foundation of China’s Extraordinary Rise,” published over a decade ago, Carl Walter and Fraser Howie posit that China – considering its structure and social needs – must develop at a rate of at least 7% GDP annually to avoid social unrest. Officially, this index fell from 14% in 2007 to 6% in 2019, but according to independent sources, it has now fallen to 2%. And thus, during the pandemic in 2020, China has officially ended up with 2% growth.

Which power would go to war in such circumstances? The answer is not at all obvious.

4.

The dominant geopolitical story today is that of a waning hegemony and a rising power. The rising power is growing, breaking the order established by the hegemon, and creating its own. A hegemon, especially one that is unused to direct competition, usually misses the moment when it could tame the challenger at a relatively low cost. The relations become tense, and insecurity arises on both sides. When the “lines of power” cross – objectively or subjectively – a great war becomes inevitable.

This is how Thucydides, who tried to generalize from the conflict between Sparta (hegemon) and Athens (rising power), described the mechanics of great conflicts. Today, the famous Harvard University political scientist Graham Allison and his supporters are resuscitating this Thucydides trap theory to explain the current relations between the U.S. (hegemon) and China (rising power). According to Allison, in the present example “the lines of power” can cross at any moment.

However, Beckley and Brands argue that in the case of rivalry between the U.S. and China, the Thucydides’ trap mechanism will fail because its supporters misunderstand the Chinese perspective. A great war may not come about because of China’s rising power but in response to the threat of its imminent decline. Especially when combined with the misleading impression of American weakness.

Many researchers liken the current U.S.-China conflict with that of the German-British one from before World War I. In both cases, the autocratic rising power threatens to overturn the international order established by the liberal hegemon. But what is not always mentioned is that the outbreak of the Great War took place shortly after Germany, surrounded by hostile forces, decided that it would never be in a better position: Russia began to dominate it economically; Great Britain and France had placed a maritime blockade on Germany; and Austria-Hungary, its main ally, was swept by ethnic conflict. It was under these circumstances that Berlin decided to go to war.

A rising power that has the prospect of further growth fights its way through challenges, and for obvious reasons this troubles the hegemon. But why would it attack, if time is working to its advantage? Conversely, an ambitious country whose international reach is growing may get into trouble. Its growth model is exhausted, the economy slows down, adults buy more diapers than parents do for their babies. It’s not so visible on the outside yet, but the government authorities are already realizing that it has just reached its apogee and will soon start to collapse.

The atmosphere of hope evaporates; the sense of uncertainty about tomorrow grows. At this point, the challenger may react according to the principle: It’s now or never.

*Editor’s note: The original language version of this article is available through a paid subscription.

**Editor’s note: This quotation, accurately translated, could not be verified.