The defining geopolitical story of our time is the slow death of U.S. hegemony in favor of a rising China. Harbingers of Beijing’s ascent are everywhere. China’s overseas investments span the globe. The Chinese navy patrols major sea lanes, while the country colonizes the South China Sea in slow motion. And the government cracks down on dissent at home while administering a hefty dose of nationalist propaganda.
Beijing’s newfound assertiveness looks at first glance like the mark of growing power and ambition. But in fact it is nothing of the sort. China’s actions reflect profound unease among the country’s leaders, as they contend with their country’s first sustained economic slowdown in a generation and can discern no end in sight. China’s economic conditions have steadily worsened since the 2008 financial crisis. The country’s growth rate has fallen by half and is likely to plunge further in the years ahead, as debt, foreign protectionism, resource depletion, and rapid aging take their toll.
China’s economic woes will make it a less competitive rival in the long term but a greater threat to the United States today. When rising powers have suffered such slowdowns in the past, they became more repressive at home and more aggressive abroad. China seems to be headed down just such a path.
In March 2007, at the height of a years-long economic boom, then Premier Wen Jiabao gave an uncharacteristically gloomy press conference. China’s growth model, Wen warned, had become “unsteady, unbalanced, uncoordinated, and unsustainable.” The warning was prescient: in the years since, China’s official gross domestic product (GDP) growth rate has dropped from 15 percent to six percent—the slowest rate in 30 years. The country’s economy is now experiencing its longest deceleration of the post-Mao era.
A growth rate of six percent could still be considered spectacular. By way of contrast, consider that the U.S. economy has been stuck at a rate of around two percent. But
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