How to Make Money After China Collapses

It’s time to talk about our business with China. China is going to collapse in the near future. In a few seconds I will explain why. We will probably realize that this is what is happening when deliveries from China suddenly stop coming. This will be huge and will impact everyone – large corporations and small businesses. Today our topic is how to prepare for this and how to Make Money after China collapses. Specifically, how small and medium size businesses can adjust to the upcoming change.

Why China is going to disappear from the business map.

First of all, let me explain why I think China is going to crash within several years or even months. It’s not my opinion and it’s not a magic fortune telling. It’s predicted by geopolitical analysts like Peter Zeihan based on data. If that is true, we should really be prepared, because it will be massive. Let me tell you what Peter Zeihan says about China collapse and then we will discuss how to prepare for it and how to Make Money after China collapses.

So, Peter Zeihan says that China will collapse for sure within the next decade, probably even sooner, for a few reasons. I will briefly explain 2 of them, but there are certainly more.

Reason #1 for China’s collapse is demography and 1 child policy.

As you know China has a population of 1.3 billion people. But the problem is that their population is aging very quickly. For many years Chinese families were not allowed to have more than 1 child. And now there are significantly more old people than young people. Many older people are not able to work anymore, but there are not enough young people to replace the retiring working force. And there are not enough tax payers and consumers to support the economy. What that means is that within several years China will stop being powerful manufacturer and exporter of the finished goods, because there are no people to produce them.

Let’s imagine for a second, how exactly this may happen (so, when it will finally happen, I will be able to go back here and say “I told you so”) . At some point of time, factories in China will probably start to postpone the deliveries. There will be long waiting lists and queues. And then they will just stop delivering at all… You can call it a best-case scenario, and it will happen quite soon, within a few years if not months. So, it’s a good time to start thinking: “How to Make Money after China collapses?”.

Reason #2 for China’s collapse is the risk of war for Taiwan.

As you might know Taiwan in the island with 25 million people located approximately 80 miles from China mainland and is a part of China, sort of. Taiwan didn’t announce independence yet, but is not governed by China for many years. Simply put, Taiwan is democratic, China is autocratic, ruled by communist party. China wants to reunite with Taiwan, even by force. Taiwan obviously doesn’t want to. If China decides to invade Taiwan, they can potentially succeed, even though United States will be helping Taiwan to protect themselves. It’s hard to predict the results of this war for Taiwan. But it’s very easy to say what will happen to China in this case!

China is one of the biggest importers in the world. I know, we think of China as of the biggest exporter of finished goods. But most importantly, they are also the biggest importer of natural gas and food. It means they are fully dependent. If they start a war, and United States together with other western countries will implement sanctions, China will not be able to buy what they need for life. This situation can potentially lead to a famine in China, and they will probably lose hundreds of millions of people in this case. Whatever the outcome may be, if that happens, there will definitely be no business with China for many years. So, all those people whose business depends on selling Chinese goods, will basically need to find ways of how to make money without China.

We don’t really know what is happening in China

As we said already, China is going to collapse within several years anyway because of their demographic situation. This situation with Taiwan can simply speed up this process. Basically, it can happen within a few months already. And one of the problems for us is that we don’t really know what is happening in China at the moment. They are not an open country where information is publicly available. So, we might not know about the collapse until it is too late.

If you want to understand China situation in more detail, please find Peter Zeihan on internet, he explains it very well, much better than this quick article.

Big companies already think how to make money after China collapses.

So, we clearly understand that China is going to crash very soon, we will see it with our own eyes. But what about all those companies, that do business with China to make money? There are many large companies like Apple that assemble their products in China. It will be tough for them, but they will manage, because they have bigger resources. By the way, Apple is already relocating some of their production lines to India and Vietnam. So, big companies will probably be fine. But there are also a lot of small businesses that order different goods from China to sell them In United States or Europe. Amazon and different dropshipping platforms are filled with Chinese goods. Imagine how China collapse will affect those sellers and those platforms.

A small side note. If you invest in Amazon stocks, and China stops shipping, there might be a disruption in sales. You might see Amazon stock price go down. And after some time, when we find a solution and sales are back to normal (if they are back to normal), Amazon stock price may rise again. It’s not a prediction, it’s just one of the possibilities.

But for today’s discussion let’s focus on small businesses that make money selling Chinese goods. It’s time to start thinking how to make money after China collapses and stops shipping goods. The preparation to that needs to be number one priority.

Which countries can replace China in terms of mass production?

The reasonable questions that immediately come to our mind are: “Which countries can replace China in terms of mass production?” and “Will we still have enough products to sell?”

First of all, the demand for goods is still there. So, the production will not just disappear, it will need to be relocated or rebuilt elsewhere. So, where will it be located after China disappears from the business map?

Some production lines will be built domestically. We will see a lot of goods being produced in North America – in United States, Canada and Mexico. So, if you are thinking about starting your own production in North America, you better hurry up, because at some point there will be a competition for the working force. A smaller chunk will go to Argentina with 45 million people. Some production will be located in Europe. The general trend will be that production lines will be located closer to consumers, because of deglobalization that’s taking place. Which basically means every continent will tend to produce goods for their own needs.

India will not replace China.

There will also be a number of Asian countries, which will kind of replace China after it’s collapse. And we need to understand that China has a lot of people. It can’t be replaced with a country with 25 million people. There need to be countries with large populations.  The first one that comes to our mind is India, because their population is even bigger than that of China. However, India doesn’t have enough infrastructure to produce goods at global scale, and they also have big internal consumption.

So, after China’s collapse, India will mostly produce good for themselves. They will not be able to produce goods for the rest of the world at scale. Even though India has a huge population, all these people don’t live close to each other. There are many different cultures and religions in India and not enough infrastructure to organize a mass production and become a single China replacement to cover the needs of the world. It doesn’t mean they will not produce anything for us. It just means they will focus on their own needs.

So, the most probable candidates in Asia to produce goods at scale are these 3 countries which I will list in a second. They have large populations, people live close to each other, and most importantly, these countries are more open and less risky. If your business is related to selling goods from China and you wonder how to make money after China collapses, these 3 countries may become a solution:

Indonesia – 274 million people
Philippines – 114 million people
Vietnam – 97 million people

Small businesses should think how to make money after China collapses.

If your main income comes from selling Chinese goods, think how this situation will affect you personally. Especially, if it happens suddenly and there will be a disruption in sales – how to make money in this case? If your entire business is built around selling Chinese goods – it becomes a very risky investment. You need to think how to diversify.

Build a second business not related to China in any way. It can be a domestic or online business, which will keep generating income for you, even if China situation goes really bad. The problem with Chinese goods and mass production is that production lines are not built in 1 day or 1 month. If China stops shipping today, it will take several years to relocate or rebuild production lines elsewhere and to restore sales. And so, we need to find a way to make money during this transition period. It can be a second business or a stable passive income. The main idea is to have enough money every month to support your family without Chinese business.

As soon as your second business becomes strong enough, you can step by step withdraw your investments from Chinese business and redirect them to something more stable. This way you will be able to get rid of your Chinese dependency before it is too late.

A good job can also be an answer to “how to make money after China collapses”.

If your business is rather small, it can also be a good idea to invest some time and money in your education to learn new skills and improve your CV. So, if China collapse happens suddenly, you could quickly find a good job to make money. A good job can be a simple answer to our main question: “how to make money after China collapses”.

And if you are looking for a good business idea to make money, I have a great post about businesses with the highest success rates. I share 7 business ideas with the lowest failure risks, so you may find it useful as well.

Have a great day and see you next time!