The New Reality of Dealing With a China in Decline

Published June 7, 2024

China’s rapid rise is slowing down, and incumbent global powers that have dominated political, military, and economic spheres for decades are scrambling to respond.

The rise of China has changed the global landscape of power, forcing readjustments. Since the economic reform and opening up in 1978, its GDP has grown on average by 9 percent a year, allowing 800 million Chinese citizens to escape poverty.Now, China’s rapid rise is slowing down and incumbent global powers that have dominated political, military, and economic spheres for decades are scrambling to respond.The unprecedented Chinese ascendancy to global economic and military power — especially since its inclusion into the World Trade Organization in 2001 — led to confusion in responses by the West before the new wave of active competition and containment.

Determining whether the best is yet to come for China or whether it has peaked requires examining both empirical evidence and non-conventional historical precedents.

The fear is that China’s future power will dominate global foreign policy, leading to a new dichotomy of a China-led multipolarity and the perceived end of the West’s hegemonic grip. However, future prospects remain far from this.

Projections of China overtaking the United States as the largest economy in the world have also been made several times but have never come to fruition.

Nevertheless, China’s workforce has already peaked, based on official statistics. The labor supply in China will drop by about 7 percent from 2025 to 2050.



RELATED: Biden’s Right: China’s Economy Is Indeed ‘On the Brink’ | Opinion

Xi Jinping boards the aircraft carrier Shandong and reviews the guard of honor at a naval port in Sanya, Hainan Province, on December 17, 2019. On April 24, U.S. Indo-Pacific Command chief John Aquilino warned China intends to be capable of invading Taiwan by 2027.© Li Gang/Xinhua via Getty Images
Published June 8, 2024

President Joe Biden said in his May 28 Time interview that China’s “got an economy that’s on the brink.”

He’s right.

And we should care because Xi Jinping may try to solve his economic problems by starting another war.

At first glance, Biden’s gloomy assessment looks wrong. The official National Bureau of Statistics reported that China’s gross domestic product beat expectations by a wide margin, growing 5 percent in the first calendar quarter of this year compared to the same period last year. That’s a slight improvement of the robust 5 percent growth for all of last year.

But neither of these reports makes sense. As Anne Stevenson-Yang of J Capital Research told me this week, “I feel the numbers just don’t mean anything anymore.”

There is now a large gap between reported results and what we can observe. The widely followed Rhodium Group believes the economy grew about 1.5 percent last year. That’s in the ballpark of the “now close to 2 percent a year” that Biden reportedly told a group of Democratic Party donors in Park City, Utah last August.




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