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Al Fin

Al Fin

Al Fin runs a number of very successful blogs that cover, energy, technology, news and politics.

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Will Russia and China Collapse Before 2020?

The key factor that will determine Russia’s collapse will be the price of oil. Five years ago, a balanced budget required only $30 per barrel of oil. This year, it has jumped to $115 because of higher government spending, waste and corruption. Next year, the figure will increase even further to $125 per barrel. If the price of oil drops to $90 a barrel, this will be the beginning of a serious economic crisis for Russia. The stabilization fund might be able to hold the budget over for a couple of years, but inevitably the state will have to cut back on social programs. These cuts in social spending will only exacerbate public discontent. It may also provoke self-sufficient regions to rethink their loyalty to Moscow. _MoscowTimes

Russia's economy is critically dependent upon the price of natural resources -- specifically gas and oil. The growing global boom in shale gas due to North American methods of horizontal drilling and fracking, have cut the legs from under Russia's extortionate pricing for natural gas sales to Europe and elsewhere. Now, if a global economic downturn causes sustained lower oil prices as well, Russia's government will be hard pressed to maintain popular morale -- or more properly, popular indifference to the Moscow government's corruption and mismanagement.

Most Russian adults do not vote, largely because they have lost faith in any hope that post-Soviet elections can be pluralistic, free and fair. The one factor that has kept middle-class Russians distracted from politics is their high level of consumption. As long as they have money to spend, they will have much more interest in consumer goods than who is sitting in the State Duma, local legislatures, Kremlin or White House — or their policies. But as soon as this relative prosperity drops, civil protest will surely awaken.

Any student of economics can name a dozen factors that carry a risk of economic collapse. Among them are the high dependence on natural resources; low productivity; an ineffective, corrupt, bloated and overly centralized state apparatus; dependent courts; technological backwardness; and an unattractive investment climate. These factors, among others, generate a vicious cycle of poverty and excludes the implementation of a long-term development strategy for the country. It also guarantees a flight of capital, as well as Russia’s most talented and innovative people to freer and more open societies. _MoscowTimes

All of these problems contribute to the low morale, disastrous state of public health, high crime and corruption, massive levels of generalised neglect, and a great sense of quasi-suicidal futility that one easily finds in Russia today. The failure of Russia's core population to reproduce to replacement rates is the result, leading inevitably to the collapse of Russia's current borders sooner or later.

As for China, the many failures, weaknesses, and shortcomings of the Beijing government and its regional extensions have been well documented. The recent crash of two of China's high speed passenger locomotives puts the exclamation point to several of China's poorly concealed, underlying problems.

The leaders have pinned their own and the country’s prestige to high-speed rail. From a standing start, China has built the world’s longest high-speed network—a genuine achievement, but one the leaders exaggerated. High-speed rail was a patriotic symbol and the next great export. Yet even before the crash, the network was plagued by breakdowns. Earlier this year the railways minister was sacked on suspicion of vast corruption. A darling programme is in trouble.

Second, the authorities have this time bungled the public relations. They first tried to blame the weather (lightning) before faulting the institute that designed the signalling. Rescuers rushed to bury part of the wreckage, either in haste to get the service going again before all the survivors had been accounted for, or because they wished to hide technology (either Chinese, or some lifted from foreign companies). Corpses were not at first handed over to families. And Grandpa Wen took days to pay his respects to victims. He had been sick, he said, which raised more questions than it answered (see article).

Third, in their unprecedented anger over the crash and its handling, ordinary Chinese and the state media have, amazingly, suddenly found common cause against the government. China has nearly 500m internet users. On Twitter-like microblogging sites, criticisms spread so quickly that censors could not keep up. Even the state-controlled media sharply questioned official explanations for the crash and criticised the government’s response to the accident. On July 29th, when the openness threatened to get out of hand, the censors ordered an end to it, but even then some state publications defied orders. Mao Zedong said that a single spark could start a prairie fire. The capacity of both journalists and the public to speak up in huge numbers has breached a firebreak not crossed since the Tiananmen protests in the pre-internet age. _Economist

The CCP government has been lording it over the Chinese people for several decades now. Although many Chinese have become quite wealthy under the more liberal economic regime of the past two decades, hundreds of millions of Chinese people continue to live in extreme poverty. In addition to poisoned water, soil, air, and food, the quality of life for large numbers of Chinese people is burdened by a toxic atmosphere of censorship and oppression. The current economic and financial bubble within China could create severe repercussions, if not allowed to deflate carefully.


Under the one-child rule, most of the new Chinese have neither siblings, cousins, uncles, aunts, nor non-familial close relations. Chinese society is become the very picture of alienation in an existential sense. The Chinese people are typically intelligent, ambitious, hard-working, and goal-oriented. But how much more corruption, oppression, and top-down greedy mismanagement will they tolerate before the nation is torn apart?

By. Al Fin

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Leave a comment
  • Anonymous on August 09 2011 said:
    Anybody who believes this analysis would believe anything. Russia may end up becoming the richest country in the world. They have the territory, the natural resources, and what what it takes to defend these. Most important they have the right leaders.
  • Anonymous on August 09 2011 said:
    [quote name="Fred Banks"]Anybody who believes this analysis would believe anything. Russia may end up becoming the richest country in the world. They have the territory, the natural resources, and what what it takes to defend these. Most important they have the right leaders.[/quote]Unfortunately, the description of Russian realities is quite accurate. With shrinking population, outdated military, lack of R&D, Russia is running out of time. It 10-20 years it may not be able to defend its current borders. Both China and Japan have historic territorial claims and even the nuclear arsenal may not stop them, particularly China who has been becoming progressively aggressive for last several years; and its aggressiveness will only accelerate.
  • Anonymous on August 10 2011 said:
    I'd love to say that you know and I dont, Vitali, but I'm afraid that it is impossible. Medvedev has started to clean up the military, and the important thing here is not equipment - dated or outdated - but the training of individual soldiers. Remember, Russia is not the US, involved in stupid wars that contribute to the economic downsizing of the American economy. As for a future war with China, forget it. Two rational countries armed to the teeth with nuclear weapons cannot go to war.As far as I am concerned, the Russian glass is not half full OR half empty. It is running over. Of course, that is a theoretical estimate, but I am a theoretical kind of guy.
  • Anonymous on February 15 2012 said:
    I have to say this but if any country is going to collapse it's going be the United States (along with most of Europe)
  • Chairde on December 08 2013 said:
    These analysis of both the Chinese and the Russians are spot on. Russian dependence on oil and gas is good in the short term but a disaster long term. Add on severe crime,drug and population problems and it is the end of the Federation. The Chinese are not happy today and even openly desire being under the rule of the Americans. Well we are not in the mood to conquer anyone but American influence and interaction with the common Chinese person will greatly increase. Even to a point of some type of Federation or Confederation like the present day EU.

    We have what the Chinese do not have, a true global reach both in military and trade areas. The Chinese are hard working and smart which we can always appreciate and use. Here in the US Chinese are considered to be white because of their behaviors. We can use them and they can use us in many ways.

    The Russians are simply not trusted here in the US because of their bellow and bluster and the way they treated their "friends" in the past. Murder and mayhem and supporting ruthless villains like Assad does not sit well with Americans. If any Russians ever want to settle here they will have to be under a strict period control of Americans before letting them live free in this country. We just don't trust them.

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