Fireworks in the shape of the Olympic rings explode above the National Stadium during the opening ceremony of the 2022 Winter Olympics in Beijing on Feb. 4, 2022. Li Xin/Pool/AFP via Getty Images
The Olympic Games in Beijing seem impressive but taking a moment to look at long-term economic trends suggest that China’s moment might be in the past already.
During the Olympics, the Chinese regime is making it seem like China is the center of the world. It has the luxury of highlighting its grand venues. It has promoted “dazzling” displays, and paid for good press and influencers to highlight “positive stories.” Some outlets already proclaim the Olympics as a signal of Xi Jinping’s and China’s “readiness.”
Yet there are serious problems with how the communist regime treats its own people and how the country acts on the world stage that need to be addressed. Some Western media outlets have correctly highlighted the plight of Uyghurs suffering from the regime’s genocidal control, and a Dutch reporter was already manhandled by the authorities on live television.
But the myth of the powerful China and the Olympics as a coming out story could demoralize the American people and their allies into thinking that China is an economic and technological powerhouse. Thus, it is also important to consider long-term trends that suggest China may already be on the decline and its moment of importance is passing.
When I was a kid in the 1980s, everybody was worried about the juggernauts of Japan and Germany overtaking the United States. Like China today, they had rather impressive economies and were the subject of fear mongering articles describing their rise. But both countries face severe demographic crisis. They don’t have enough workers to support their aging population. Japan faced a severe economic recession that took it a decade to recover from. Germany is the relative workhorse of Europe but is being dragged down by debt-ridden countries like Greece and Spain.
Then in high school, I first started reading about the rise of China. For literally the last 20 years, I’ve seen pictures of a red Chinese flag on the cover of Time magazine with a fearful headline declaring how quickly China will take over the world. But Beijing’s one-child policy has introduced demographic challenges similar to Germany and Japan, with an aging population and a lack of young workers to support the care of the elderly. This causes immediate problems with recruiting and retention for the military. Many Chinese kids have “little emperor” syndrome, which results in discipline and physical fitness issues for recruiters. Of course, officials have backtracked and now claim the opposite. In the long term, the imbalance of men to women result in difficulty in finding brides and social dysfunction such as increasing crime rates.
China’s economic growth remains uneven. For example, China has averaged record growth in GDP since 1979 but still has a significant number of people living in caves. The average net earnings for Chinese citizens remain far lower than their American or even European counterparts. China’s GDP looks so big because it has so many people–but its population growth is falling. So its progress was amazing but didn’t touch everybody—and most importantly, it may not continue forever.
A man preparing beans outside his house in a village near the Yellow River in Lankao county, Henan Province, on Sept. 28, 2017. Greg Baker/AFP/Getty Images
In the 2008 recession, China embarked on an unprecedented loan and spending spree that prevented a downturn like the one experienced in America and across the world. But it now has a debt bubble that is larger than the one faced by the United States in 2008. Furthermore, China’s aging population and stagnant workplace productivity will remain so.
The last time China recorded an economic downturn was in 1976, so it will eventually have to face a correction that will dwarf the U.S. financial crisis of 2008. It will perhaps be a crash or maybe a decade-long recession similar to the one experienced by the much-vaunted Japanese economy. There are signs in smaller cities of the bubble bursting. Beijing is trying to make sure China lands softly by loosening credit, opening up mortgages, and funneling money to bankrupt developers—but the command economy can only do so much.
When the crash does come, it will hit many lower- and middle-class workers who bought expensive properties under the government-promoted belief that they were good investments. That will serve to further lessen the trust in Chinese Communist Party (CCP) officials who seem to get rich while the people suffer. As I discussed, an authoritarian government can command bodies but often alienates the hearts of the people, and the disproportionate impact will have disastrous consequences for the CCP.
A Chinese economic meltdown will have worldwide effects that include foreign-supplied commodities such as iron ore, coking coal, and copper. It will lower the prices of foreign-listed companies that do business in China. The lack of capital gains income will destroy the market for luxury goods in China, consumer spending in general, and the companies that supply those products.
Finally, communist China is a good example of why a command economy is not preferable. That might go without saying, but there are many Americans that seem stifled by the often slow and messy democratic process. While many of the safeguards like the filibuster haven’t been removed yet, China’s command-driven bubble is a good example of the dangers of concentrating too much power in the hands of only one faction. That bubble is so big because the people most affected by it didn’t have a say in economic policy.
Whatever course the correction takes, it will mean that China will not catch up with the United States within the next 50 years and may already be ready for an inexorable decline. So enjoy the Olympics. But make sure to remember the lies behind the spectacle. The Uyghurs are still being abused, athletes often face speech codes, and this is not Berlin in 1936, more like London in 1946, with a power that looks strong but is far less so when you look closely.
Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times.
Morgan Deane
Author
Morgan Deane is a former U.S. Marine, a military historian, and a freelance author. He studied military history at Kings College London and Norwich University. Morgan works as a professor of military history at the American Public University. He is a prolific author whose writings include "Decisive Battles in Chinese History," "Dragon’s Claws with Feet of Clay: A Primer on Modern Chinese Strategy," and the forthcoming, "Beyond Sunzi: Classical Chinese Debates on War and Government." His military analysis has been published in Real Clear Defense and Strategy Bridge, among other publications.
