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- Analysis of France's Strategic Advantages in a Disrupted Global Environment
Analysis of France's Strategic Advantages in a Disrupted Global Environment
Explore how France's economic resilience and self-sufficiency, particularly in energy and agriculture, position the country favorably in a world of disrupted global trade. Learn how France's strategic choices diverge from Germany's and the potential implications for the European Union.
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Germany redesigned its political and its economic model around the realities of globalization in order to take the most advantage of it.
France never did, and that's one of the reasons why the French are having all these protests over pensions,
just trying to get this into what we might consider a more viable economic model under the globalized rubric
has never been something they were interested in.
But in a world where global trade breaks down, in a world where global energy is hard to get come by,
France looks pretty good. Their nuclear fleet takes care of most of their local energy issues,
and they're much closer to places like the North Sea or especially North Western Africa in order
to get the rest. Their self-sufficient and agriculture, they've got a much better demographic
structure, and most importantly, they never integrated their economic system into the European
Union whole in the way that Germany did. In fact, as a percentage of GDP, they're not that much
more involved than the Brits are after Brexit. So they don't have nearly as painful of an
adjustment to make, and a lot of the things that the Germans and everyone else is going to have to do,
the French just consider this a normal operation. If Germany cannot manage a very dramatic transition,
Germany will go from being the largest provider of funds to the EU to a net taker,
And I don't see how the EU in that situation can exist.
Okay.
Sure. So again, it's those two issues of geography and demography.
Now that the world is facing a legalization moment, geography is going to be far more important for determining who your trading partners are,
and the demographic structure will determine who can play at all.
Because if you don't have a lot of people in your 20s and your 30s, you're not going to do a lot of consumption.
And if you do have a lot of people in your 20s and your 30s, you're going to protect that consumption and resist imports.
If you have a lot of people in your 40s, 50s, and early 60s, you may be very productive,
but you still have to have someplace to sell your goods, which means you're going to have
to be a bit of a security taker in order to access the markets that you need.
And then, of course, you break down the global whole and the resources that we need in
supply chains that's to be on the world.
That all goes away, and it's much more focused on the local.
In that Europe overall is a big loser.
The demographic structure is beyond broken in most European countries and the European
continent is heavily dependent upon international trade in order to maintain its economic structure
and its current form.
So the trauma of changing that is going to be extreme.
The Western hemisphere looks pretty good.
It's net exporter of energy, net exporter of food, and it's in the process of doubling
the size of the local industrial plant in preparation for what's going down in Germany
in China right now. East Asia, it's like the only part of the world with the worst demographic
structure than Europe and the only part of the world that is more trade dependent than Europe.
And so that is a place where these breakdowns get very real and very fast and very loud.
They have increased their GDP by a factor of 4 to 5 based on who's doing the math.
Now we all have heard the stories of Chinese statistics and have a questionable, but let's assume
that four to five factors off by 20 or 30 percent, that's still a really good growth story.
But it was a one-way trip. Two problems here. Number one, it was not paid for with trade or
with consumption. It was paid for with debt. And China's debt today compared to where it wasn't
the year 2000 is 34 times what it was. So yes, the economy may be increased by a factor of five,
but their debt is increased by a factor of 34.
To put this in European terms,
imagine Greece, if Greece had spent five times as much.
That's China.
That's not sustainable.
And that is the story of Chinese economic development.
