The Continuing Crisis in Sino-American Relations

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The Continuing Crisis in Sino-American Relations

The United States and China are running a “superpower marathon” which may last a century.  However, both history and China’s recent trajectory suggest that the Sino-American competition is likely to reach its moment of maximum danger during the 2020s.

The reason is that China has reached a particularly perilous stage in its life as a rising power.  It’s at the point at which it has gained the capability to dramatically disrupt the existing order but recognizes that time is not on its side. 

What’s the bottom line?  America needs a sustainable long-term strategy for managing and winning a protracted global competition.  But more urgently, the United States needs a near-term strategy for navigating the danger zone.

Most debate on America’s China policy focuses on the dangers of a rising and confident China.  But the United States actually faces a more complex and volatile threat: an already powerful but increasingly insecure China beset by internal problems and a brewing international backlash.

China already has the money and muscle to challenge the United States in key areas.  But China’s geopolitical window of opportunity may be closing as fast as it opened. Since 2007, China’s annual economic growth rate has dropped by more than half, and China’s productivity has declined by nearly 10 percent, meaning that it is spending more to produce less.  Meanwhile, debt has ballooned eightfold and totaled 335 percent of gross domestic product at the end of 2020.  No country in history has ever racked up so much debt so fast in peacetime!

Furthermore, China has little hope of reversing these trends, because it is about to suffer the worst aging crisis in history.  Over the next 30 years, China will lose 200 million working-age adults and gain 300 million senior citizens.  Any country that has aged, accumulated debt, or lost productivity at anything close to China’s current pace has lost at least one decade to near-zero economic growth. And as economic growth falls, the dangers of social and political unrest rise.  China’s leaders are well aware of these trends.  President Xi Jinping has given multiple internal speeches warning party members of the potential for a Soviet-style collapse.  To limit the blowback, China’s government has outlawed negative economic news and Chinese elites are moving their money and children out of the country en masse. 

Meanwhile, China faces a rising wave of foreign hostility.  According to leaked Chinese government reports and independent Western analyses, negative views of China have soared to highs not seen since the Tiananmen Square massacre of 1989...

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