If China’s rise presents any immediate danger, it’s the risk that it might cause Americans to ignore the sources of our strength. For all of China’s genuine successes, there’s an even greater dose of exaggeration—the product of a political system long adept at hiding its weaknesses to strangers.
China remains an underdeveloped country, its economy barely one-third the size of America’s. Its leaders live in fear of peasant revolts, ethnic separatists, underground religious movements, political dissidents and the free flow of information. Its economy remains profoundly hobbled by corruption, inefficient state-owned enterprises and an immature banking system. (See Joseph Sternberg nearby.)
There is no genuine rule of law and its regulatory environment has become increasingly unpredictable for foreign investors and local entrepreneurs. It suffers from an aging population and environmental damage Americans wouldn’t tolerate. Its greatest comparative advantage—cheap labor—is under strain from rising domestic wages and competition from places like Vietnam and Bangladesh.
Above all, China suffers from an absence of self-correcting mechanisms, beginning at the top with its authoritarian political system.
Join the conversation as a VIP Member