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Western elites figured China would surpass and displace America in short order. Only now, the communists' economy is sputtering.
Photo by Kevin Frayer/Getty Images

Western elites figured China would surpass and displace America in short order. Only now, the communists' economy is sputtering.

Political scientist and seasoned U.S. national security analyst Graham Allison suggested in his 2017 book "Destined for War" — which Elon Musk recently hyped — that China might be on its way to overtaking America, thereby becoming the world's pre-eminent superpower. Noting that in the supermajority of historic cases where a rising power threatened to displace a ruling power, "war is almost always the result," Allison proffered some ways the U.S. could make a graceful exit, stage right.

In recent years, many other fatalists in the Washington establishment and in think-tanks across the Anglosphere similarly prophesied that China would soon eat America's lunch.

Reality has, however, served to check Beijing's ambitions and the experts' presumption of Chinese ascendancy.

The Associated Press recently reported that China's economic growth had fallen short of forecasts in the second quarter of the year, growing at a 6.3% annual pace from April to June contra the 7%+ that some had expected — a disappointment after an already anemic pace set in 2022, which World Finance indicated was representative of the Chinese economy's weakest performance since 1976.

Unemployment among youths ages 16 to 24 jumped to a record 21.3% last month, up from 20.9% the month before. This could prove to be a destabilizing affront to the young who accepted authoritarian rule in exchange for the Chinese Communist Party's promise of progressive increases in living standards.

Investment in property development is reportedly down too. This "vital driver of both industrial and consumer demand" plummeted 7.9% in the first half of 2023 as compared to the same period the year prior.
Exports reportedly tanked 12.4% in June compared to last year.

Moody’s Analytics economist Harry Murphy Cruise suggested that "China’s recovery is going from bad to worse. ... After a sugar injection in the opening months of 2023, the pandemic hangover is plaguing China’s recovery."

The Guardian indicated that China's estimated annual rate of GDP growth is slowing and is set to stabilize at around 4%.

"At this rate it will take many decades before income per person in China catches up with that of other leading economies," wrote John Quiggin, a professor of economics at the University of Queensland. "The processes of industrialisation and urbanisation are reaching their limits in China, as they have already done in most developed countries. Just as the industrial economy replaced agriculture as the central focus of economic activity, services, and particularly information services, are replacing industry."

Just as middle-class Americans once saw their jobs outsourced to China and India, China is now "losing manufacturing industries to competitors like Vietnam," wrote Quiggin. "Meanwhile, as education standards improve, younger workers are increasingly unwilling to take low-skilled assembly line jobs."

Rana Mitter, professor of U.S.-Asia relations at the Harvard Kennedy School, has similarly stressed that "China's economic recovery seems to have stalled, and the CCP's standing at home still depends on Xi Jinping's government creating a 'Chinese dream' of a middle-class lifestyle."
Compounding problems for the communist nation is the fallout of its brutal abortion regime.

TheBlaze previously discussed how, owing to the CCP's one-child policy implemented in 1980, as well as to other correlated factors such as a decrease in the number of women of childbearing age, declining fertility, and higher suicide rates in women than in men, China faces a demographic crisis.

Whereas in 1950, a year after the communists formally took power, China's fertility rate was 5.29, as of last summer, it hovered around 1.16.

Mitter indicated that China's working age population will drastically shrink over the next 15 years, meaning "technology will need to adapt to create new jobs for a smaller workforce, while providing enough growth to pay for pensions and healthcare for the rapidly growing elderly population."

With or without such technological adaptations, this crunch will be felt economically, suggested New York Times columnist Bret Stephens, who recently invoked former head of emerging markets at Morgan Stanley Ruchir Sharma's sense that there is "roughly a one-percentage-point decline in economic growth for every percentage-point decline in population."

While Mitter suggested there may be ways for China to improve its situation, it is "laying traps for itself."

For instance, Chinese economists, reporters, and experts who would otherwise raise the alarm about ballooning debts and ineffective government processes are frequently censored or intimidated, meaning problematic trends will go on unreported and unresolved.

Another trap lies in Beijing's one-China ambitions.

Should Beijing's saber-rattling over the sovereign island nation of Taiwan lead to a conflict, Mitter says its economy would be abruptly brought to a halt: "Any military confrontation in the region would crash supply chains, lead investors to flee, and result in huge mutual sanctions between China and its western business partners."

Regardless of whether China ensnares itself in a foreign adventure or the kind of statist mismanagement Ludwig von Mises warned about over a century ago, Stephens noted the Asian nation's "economy was already in trouble before the pandemic: a real estate bubble at the point of bursting, record high capital flight, the end of Hong Kong as a relatively free city and Chinese companies like Huawei increasingly unwelcome in Western countries on account of espionage and intellectual-property-theft concerns."

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