On the decline.

The ‘rising superpower’ myth about China

Opinion by Peter Bergen and Joel Rayburn

There isn’t much of anything that the polarized politicians of Washington, DC agree on, but there is a large degree of bipartisan consensus around one big, supposed threat: China. The purportedly rising nation with a plausible plan to replace the US as the dominant superpower.

The Biden administration’s 2022 National Security Strategy describes China as “the only competitor with both the intent to reshape the international order and, increasingly, the economic, diplomatic, military and technological power to advance that objective.”

Similarly, the Trump administration said in 2020 that the United States was taking action to protect itself and its partners “from an increasingly assertive China.”

In fact, by many measures, China is on the decline.

It’s an error American leaders are prone to making. After 9/11, the US overestimated the threat posed by Saddam Hussein’s Iraq and waged a war there based on false assumptions about Saddam’s purported weapons of mass destruction program and ties to al Qaeda.

Some Americans also initially overestimated Russia’s ability to quickly seize and subdue Ukraine a year and a half ago.

As a result of the perceived threat of a rising China, the US and some of its allies are now undertaking a large retooling of virtually every government sector – from militaries to intelligence and security agencies, diplomacy and economic relations, trade regulations, higher education funding, social media oversight and more.

The Biden administration’s record $842 billion budget request for the Pentagon for fiscal year 2024 is “driven by the seriousness of our strategic competition with the People’s Republic of China,” according to US Secretary of Defense, Lloyd Austin.

But is this vast reorientation designed to counter a threat from China that could fizzle out in the next decade or so? An examination of China’s dire demographic trends, intensifying economic woes and polling suggesting declining international standing certainly suggests so.

A recipe for demographic disaster

The demographic problem is arguably the long-term trend that should most alarm Chinese officials. China’s “one child” policy, one of history’s boldest experiments in social engineering, which was officially inaugurated in 1980 and ended in 2016, now has produced what it was designed to produce: a sharp, inexorable contraction of the country’s population.

China’s fertility rate dropped to a record low of 1.09 last year, according to the country’s Population and Development Research Center, making it the lowest level among countries with a population of more than 100 million.

China’s aging population will present significant problems for Chinese military power. China can now draw from an enormous reservoir of manpower to serve in the large armed forces President Xi Jinping has been building – but that reservoir is shrinking rapidly.

The US Census Bureau estimates China today has about 350 million males aged 15-49, the demographic cohort spanning the bulk of its military. That’s a steep drop from China’s 2012 peak of about 400 million in the same category, and by 2040 that number will drop to just over 299 million.

By contrast, key Chinese rival India already has about 402 million males aged 15-49, and by 2040 that figure will grow to 424 million, according to US Census Bureau figures.

Manpower is not the only important measure of a country’s military potential. The United States, for example, has only about a quarter of the same military-aged male population that China does. (Though that 15-49 year-old bracket, unlike China’s, is predicted to steadily rise in the coming decades.)

But in China’s case, the accelerating contraction of the 15-49 population group is an unprecedented problem – not just in the military sector but in the whole of the Chinese labor force. By 2050, almost 38% of the Chinese population will be over 60, and the country’s elderly population will outnumber its military-aged population by that point, estimates the US Census Bureau.

It’s difficult to see how the Chinese economic model that requires constant growth can sustain itself as its productive population collapses.

An economy in trouble

Then there are China’s myriad of economic problems, many of which are self-inflicted from Xi’s rigid “zero-Covid” policy. (After a rapid spurt of activity following the lifting of Covid-19 lockdowns earlier this year, China’s economy is now flagging.)

Such problems are particularly acute among the young. Unemployment among Chinese 16- to 24-year-olds in urban areas was at a record 21.3% in June. After that, China’s National Bureau of Statistics said it would suspend publishing youth unemployment data in the future. 

A large-scale real estate crash also appears to be brewing. Evergrande, one of China’s largest real estate developers, started collapsing in 2021. It is the world’s most indebted developer, according to the Financial Times, with over $340 billion in liabilities. Last week Evergrande’s shares crashed by more than 70%.   

These financial failures are important because real estate plays an outsized role in the Chinese economy. In some years, real estate has accounted for a quarter of China’s GDP, yet the most recent available figures from 2018 indicated that about one-fifth of Chinese apartments were vacant, more than 130 million units, according to a study by China’s Southwestern University of Finance and Economics. 

Rocky international standing

At the same time, China’s imprisonment of more than a million Uyghurs and other ethnic minorities, according to the United Nations citing “credible reports,” has resulted in an economic and political cost for Beijing as the US has imposed trade restrictions on Chinese companies that have any alleged connection to these policies. (China has called the accusations of mass imprisonment “completely untrue”). 

Meanwhile, China’s expansive “Belt and Road” investment policies worldwide have proven to be a financial drag as billions of dollars’ worth of loans haven’t been repaid to China.  

China has worked hard to position itself as an international peacemaker, as when it brokered a rapprochement agreement between Saudi Arabia and Iran earlier this year.  

But on balance, China is losing friends and international standing. Last year, Pew Research Center found “negative views of China remain at or near historic highs in many of the 19 countries” where the organization polled.

What does a weaker China mean?

What does it signify that China’s national power, which today is vast, is almost certain to be weaker in the future? The jury is out on whether Beijing, seeing a closing window of opportunity to achieve its goals by military means, could become more aggressive in the immediate term.

It’s true that declining powers have grown aggressive at times in the past, notably the late 1970s USSR and contemporary Russia. Russia’s Ukraine invasion is a caution to China and everyone else about the danger of overconfidently going to war with a military that lacks recent experience of a major conflict. Aside from brief clashes with Vietnam in 1979 and India in 1962, the last time China fought a major, protracted war was seven decades ago in Korea. 

Conversely, it is not hard to envision China in 2035 or 2040 being too overwhelmed by its own socioeconomic crises to project power abroad. After all, the weight of China’s elderly population on the rest of its society, economy and state will be truly crushing just a few years from now.

Other societies in modern history, such as Italy and Japan, have grown as old as China’s population is becoming, but never on such a vast scale and never as a result of an intentional policy of depopulation. China is now offering incentives for having children such as tax deductions for families and strengthening maternity leave, but they seem to have had scant impact so far.

Beijing seems to have no real, workable plan for steering away from the demographic cliff or for managing the end of the Communist Party’s economic growth model. If Xi and his strategists have a feasible plan for nimbly averting China’s demographic doom, they are keeping very quiet about it. What’s more likely is that no such plan does or can exist.

This brings us back to the question of national security strategies for the United States and its allies. Declining or not, China poses clear strategic dangers for the near term. There’s its longtime theft of American intellectual property, its massive cyber breaches of US government institutions, its aggressive efforts to transform the South China Sea from international waters into a Chinese lake, its saber-rattling over Taiwan, its suppression of democracy in Hong Kong and its overall large-scale military buildup.

As a result of some of these trends, the previous Trump administration’s National Security Strategy made the case that China “actively competes” against the United States and is a “revisionist power.” Trump imposed tariffs on a wide range of Chinese goods.

The Biden administration has largely kept the Trump-era tariffs on Chinese goods in place, and last month, it prohibited or restricted a range of American investments in advanced technologies in China, including in AI and quantum computing. 

It’s fair to criticize the US and its allies for underestimating the dangers from China for most of the past quarter-century, and it’s right and reasonable to refocus on deterring Chinese aggression in the near term.

But what comes after the near term? It’s a strategic error to underestimate an adversary, but it’s just as great an error to overestimate one.