China’s Biggest Problem Just Got SO MUCH Worse

Chapters

1. 0:00

   China's Water Crisis

   China has a massive problem right now, a fundamental weakness that has long played a defining role in their society, and even in their approach to war and politics. And that weakness has just been made all the more painful by recent global developments around data and AI, which are exposing, in a brand new modern way, a very real limitation to Chinese growth and expansion. That limitation is something deceptively simple: water. China simply doesn't have enough of it, and they haven't for decades. Already years ago, due to this fundamental limitation, we were seeing strong warning signs of potential future water wars involving China, as Beijing sought to capture or direct critical water resources from its neighbors in Russia, India, and in Southeast and Central Asia. Things got extremely tense, to put it mildly, especially in the South. And that tension has never really resolved. It just simply hasn't developed into outright conflict quite yet.

2. 0:57

   AI Boom Exacerbates Crisis

   But now layered on top of this latent water crisis comes a brand new entrant, the AI boom. Something that is increasing the demand for water in unprecedented ways, at least if you want to compete at maximum efficiency. AI requires data centers, and the most energy-efficient, low-cost data centers require huge quantities of water. But in either case, China does not get to experience the best form of this industry. Their existing water crisis puts them at a structural disadvantage. And that means that all else equal, they could fall further behind and accumulate higher costs over time than their competition. All of this gives China more incentive than they've ever had to further provoke the water conflicts that they've already been anything but shy about. Because it's no longer just about the water, it's about everything the water empowers, which increasingly is the entire modern age. China's largest potential source of additional water is Russia. And Russia is currently structurally the weakest it has ever been due to the war in Ukraine. That weakness has already led them to make a series of massive infrastructure concessions to China, things that Russia had resisted for decades.

3. 2:50

   Water War Possibility

   But could that soon include water concessions as well? The deeper we look, the more this story looks like one of the most important stories in modern geopolitics. So could China start a genuine water war soon? Or could this push things so far that the fragile status quo among China's neighbors might be broken, causing a chain of actions and reactions?

4. 3:12

   Investigation

   That's what we'll investigate in today's video.

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