McManus: China's economy is slowing, its population aging. That could make it dangerous

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Sep 14, 2022, 2:11:08 PMSep 14

Doyle McManus: China's economy is slowing, its population aging. That
could make it dangerous
But even an aging China with a slow-growing economy will be a powerful
commercial, technological and military competitor.

Chinese President Xi Jinping at a ceremony to honor contributions to the
Beijing 2022 Winter Olympics and Paralympics at the Great Hall of the
People on April 8, 2022, in Beijing.Kevin Frayer/Getty Images/TNS
Opinion by Doyle McManus
September 14, 2022 10:00 AM

The Trust Project We are part of The Trust Project.
China's economy is in trouble. The juggernaut that once looked bound for
global domination is slowing down — and not only in the short run.

The Chinese economy's projected growth this year has slowed to about 3%,
missing the government's target of 5.5% by an embarrassingly wide margin.

After decades of galloping expansion, that would be the second-worst
performance in more than 40 years. Only 2020, with its COVID-induced
recession, was worse.

Unemployment among young workers has ballooned to 20%. Fuel prices are
rising thanks to Russia's war in Ukraine. The overbuilt housing industry
is teetering. And President Xi Jinping's draconian "COVID Zero"
lockdowns have created havoc, most recently in technology-heavy Chengdu
(population 21 million).

Remember when Americans fretted about China overtaking the United States
to claim the title of world's largest economy? That date has been
postponed to 2033 or later, and a few economists suggest it might not
happen at all.

Some of those problems may be short term, driven by a slowing global
economy and Xi's refusal to import foreign COVID-19 vaccines.

But China also faces long-term challenges that won't go away, beginning
with an onrushing demographic decline.

The United Nations projects that China's population will shrink roughly
40% by the end of the century, from 1.4 billion to a mere 800 million or
so. Some demographers say the decline will be steeper; either way, India
will soon take over as No. 1.

The population decline stems from a low birthrate, which also means
China's population is aging and its workforce shrinking. By 2050, more
than a quarter of the population will be older than 65, Australia's Lowy
Institute projects. Lowy expects China's growth rate to slow to an
average of less than 3% over the next three decades as a result.

China-watchers agree on those doleful forecasts. They disagree, though,
on what that means for the country's future and for U.S. policy. How
does a rising superpower react when the foundations of its strength
appear to be eroding?

Two foreign policy scholars, Hal Brands of Johns Hopkins and Michael
Beckley of Tufts, have offered a frightening thesis: China's leaders
know their power is about to diminish, and that will make them more
likely to take risks in the short run — to invade Taiwan, for example.

China "is losing confidence that time is on its side," they write in a
recent book, "Danger Zone: The Coming Conflict With China."

"China will have strong incentives to use force against its neighbors …
even at risk of war with the United States," they warn. The "moment of
maximum danger," they suggest, is this decade: the 2020s.

A chorus of other China scholars have disagreed.

First, they note, there's no evidence that Xi or other leaders believe
their power is declining; they continue to predict the rise of China and
the decline of the West.

Even if China's economy slows down, it will be growing — still the
second-largest in the world.

"Countries can muddle along with a great deal of poor economic
performance and still be a major force in international politics," noted
Aaron L. Friedberg of Princeton, author of "Getting China Wrong."

Besides, Xi and other Chinese leaders have a strategy for solving their
economic challenge, he argued. "They see advances in technology as the
key to solving all their problems," he told me. "That's how they plan to
achieve higher productivity and reasonably high economic growth."

"We have to do more … to slow down China's technological development,"
he said, beginning with tighter controls on the export to Beijing of
U.S. and other Western technology.

A rosier scenario, Friedberg and others noted, is that a slowing economy
could induce China's leaders to devote less spending to military
strength and more to improving the lives of the Chinese people.

"We should not assume that a weaker China would be aggressive," Bonnie
S. Glaser of the German Marshall Fund argued. "China could turn inward.
Maybe China isn't as intent on unification with Taiwan as it is on
internal stability."

So the 21st century may not be Chinese after all. China's rise to global
power is neither inevitable nor foreordained.

But even an aging China with a slow-growing economy will be a powerful
commercial, technological and military competitor. At least until the
end of Xi's third term in 2027, its leaders will still be ambitious,
still bent on absorbing Taiwan, still intent on supplanting the United
States as the dominant power in Asia.

China's challenge is changing its shape, but it isn't going away.

Doyle McManus is a columnist for the Los Angeles Times . Readers may
send him email at .

©2022 Los Angeles Times
Distributed by Tribune Content Agency, LLC.

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