There is increasing talk about what would trigger the next world war, a risk that was on my mind during my visit to China. I spell the risks out in this video.
The Financial Times reported on October 9 that the US Government has taken the decision to sail its Navy within the 12-mile limit claimed by China around artificial islands it built near the Spratly Islands. This gesture of defiance is part of an unfolding dispute over who owns the oil rents below the seas off the coast east of Vietnam and China.
The territorial dispute started with a land grab in the South China Sea. But why should this lead to a military conflict which, if it dragged in the United States, could begin a world war?
Over the past two decades, China intensified its “economic contradictions”. Although the constitution retains the land of China in public ownership, the Politburo failed to see that the rent of land was what rent-seekers wanted. Those rents are being systematically privatised, creating Haves and Have-nots in the communist paradise.
The critical period will be the next 10 years. Beijing has launched a programme to build 80 mega cities into which it will drag 100m people from the countryside. Peasant families are selling the use rights to their plots of land to property speculators and are moving into urban skyscrapers.
Traditionally, when the economy turned down, the Politburo maintained urban stability by exporting tens of millions of unemployed workers back to their extended families in the countryside. There they worked on the family plots until the urban economy picked up again. That option is being blocked off, now, as the family dwellings are being levelled to make way for skyscrapers.
So what happens when the global land cycle peaks in 2026, crashing into the depression of 2028? The traditional safety value will no longer exist. Families will be stuck in the towns, unemployed, discontented…
As social tensions mount, will Beijing conscript the able-bodied young men into the army – so that they cannot congregate in the town squares, where they might cause trouble? Having mobilised the population, will the Politburo then be tempted to use military remedies in its dispute with Japan over control of the South China Sea?