China is at risk of following Japan into stagnation. It is especially likely given the massive wave of manufacturing repatriation going on now. If China loses its position as the world's manufacturer, it will have to rely on its untested military strength to obtain resources to appease its restless population. Interesting times indeed.
> China loses its position as the world's manufacturer
they will not because the reason japan (and the US) lost theirs is that china was cheap.
Where are you going to get this type of labour - skilled but cheap - other than china, in the next 10-30 years? Southeastern asian countries could make up some of the amount, but if they could do it today, they would've dominated already!
The repatriation of manufacturing is political propaganda - it won't work economically, as consumers' preferences is overwhelmingly for cheap goods, not expensive patriotism.
There's no indication that the manufacturing capacity could be taken over by a south-eastern asian country. If they could do so, why is it not done today, rather than in the future (when china loses their manufacturing capacity)?
Changes take time, and there are massive opportunity costs to moving your supply chain base elsewhere. If other countries can do manufacturing equally well (same quality, cost, legal environment, etc), but you already have your base fully established in China serving your entire global operations, moving to the another country gives you no benefits, and you face the risk of severe disruptions to your operations if anything goes wrong.
So the world will only move out of China if other countries like India can offer significantly lower cost at same quality, which they haven't been able to do, or if there are significant geopolitical risks to staying, which seems likelier by the day.
I don’t think companies are going to fully leave the Chinese market or anything. That wouldn’t make any sense. But divest their exposure and locate factories all around the world because of the risk due to concentration? Yea definitely.
