Academics have long been lecturing Americans that the era of American dominance on the global stage is over. The future, we’re told by analysts and the talking heads on cable news belongs to China. Perhaps worst of all, many of our elected representatives and appointed policymakers believe it, too.
They couldn’t be more wrong.
A Creation of the West
The singular reason China is where it is today: America and the West handed over hundreds of billions of dollars of technology, know-how, intellectual property, as well as whole factories throughout the course of four decades. It transformed China from one of the world’s poorest countries to one of the richest. It certainly wasn’t the Chinese Communist Party (CCP) that did that, they had 30 years to do so but only brought the country to the brink of ruin.
From the revolution in 1949 onward, the CCP presided over one disaster after another.
The Chinese people suffered horribly under the failures of successive “five-year plans” that led to devastating famines, mass persecutions, prison camps for millions, executions, cultural and social destruction, and the massacre of thousands of students in Tiananmen Square in 1989. And let’s not forget the worst air, water, and ground pollution on the planet.
The key point to remember is that the CCP hasn’t changed; it couldn’t manage China when it was a poor country, and it is mismanaging China’s wealth today, which is putting it mildly.
The evidence is everywhere.
Cracks in the Chinese Economy
With a debt-to-GDP ratio of greater than 300 percent, China faces a debt crisis that will likely surpass the financial crisis of 2008. What’s more, based on energy consumption estimates, the Chinese economy is up to 30 percent smaller than what government statistics say and it’s also slowing down.
What’s more, with its rising costs and cheaper labor markets nearby, manufacturers are leaving China. Many, of course, are Chinese owned factories relocating to Vietnam to avoid U.S. tariffs. How effective that will be remains to be seen, especially with regard to highly-skilled labor, which China has plenty of. As growth slows, more of that labor pool will be out of work.
Capital is also leaving China. The much-touted middle class of China, supposed to drive China’s economy forward in the 21st century isn’t buying what the CCP is selling. Not any more. Middle class Chinese are no longer keen on investing money in their country as much as they are getting their cash out of it. Extended visas, overseas property investments, and other outward looking behavior indicates a deep pessimism about the future of China.
That explains why consumer spending—the key to long term economic growth and stability—is grinding to a halt. Car sales, a major economic indicator, even fell in 2018; the first time that’s happened since the 1990s. And they continue to fall, dropping 14.6 percent in April of 2019. This is a fundamental problem that can’t be overstated.
Consumer Sentiment Tells the Story
At a time when the CCP is trying to sell the world on its economic prowess with the Belt and Road Initiative (BRI) and Made In China 2025, its consumer sentiment is thoroughly pessimistic. Who can blame them? What intelligent person wants to live in a surveillance society that puts you in camp without trial for a bad “social credit” rating?
That program, with which China has used to suppress and imprison millions, may well backfire on the CCP. And with rising discontent among millions of Muslims in the Western provinces, an aging population, a desperate lack of resources coupled with a shrinking capacity to feed itself, China is closer to civil rebellion than it cares to admit. Internal security spending that exceeds their national defense budget tells that tale as well any other statistic.
These are just a few of the problems that the CCP is causing and facing at the same time. Their answer to all of them is to print more money, put more people into prison, and ravage weaker nations for their resources.
Are those the attributes of the next global hegemon?
Not at all. At some point, as the Russians discovered in the old Soviet Union, the law of diminishing returns asserts itself. The CCP is facing a similar fate as their cannibal capitalism devours their economy from within.
But what of the BRI and Made In China 2025 plan? Are they not the plans of a great power?
They are indeed, but they are only plans.
Keeping up Appearances – But for How Long?
But aspirations and advertising are much different than execution and long-term management, something that China has already demonstrated. The CCP is finding that it’s quite difficult to sustain its own economy where dependence on foreign resources is almost total, that relies on a culture of graft and fraud, theft and forced labor rather than market signals and fair labor.
And the United States narrowing China’s access to the U.S. market, their dependence on foreign markets will increase going forward. That’s due to the U.S. policy of stiff tariffs on hundreds of billions of dollars’ worth of import and the banning Huawei and other major Chinese telecom firms.
Just as critical, however, is the Trump administration’s aim to hamstring China’s economy even further by convincing the European Union to shift its trade posture away from it and toward the United States. Forced to choose, Europe, particularly the U.K., will lean toward the United States. The CCP may well find itself in an even more precarious economic—and political—condition sooner than it could imagine.
The Writing Is on the Wall
So is China really the economic model of the 21st century? Even though it’s a world leader in artificial intelligence, biotechnology, robotics, and other high tech industries, it also leads the world in waste and pollution, and most importantly, in human cruelty and misery.
Like the Soviet Union before it, China’s inhuman and unsustainable economy will too, one day collapse. All of this is unfolding in the coming days, months, and perhaps years.
James Gorrie is a writer based in Texas. He is the author of “The China Crisis.”
Views expressed in this article are the opinions of the author and do not necessarily reflect the views of The Epoch Times.