Communist China’s Economy is in Crisis – We Should Do What We Can to Ensure It Stays That Way

General Secretary Xi Jinping speaks at the 19th National Congress of the CCP via Wikimedia Commons.

ANALYSIS – As a long-time critic of the communist regime ruling China, and someone who regularly warns of the existential danger to America and its allies posed by the Chinese Communist Party (CCP) and its People’s Liberation Army (PLA), I have also noted some of its profound weaknesses.

And also, how we need to exploit them.

One of the major weaknesses facing the CCP is demographic. Due to its own draconian one child policy, now belatedly rescinded, China’s population will soon start shrinking fast.

As reported by Fortune, in July, the head of population for China’s National Health Commission, told a conference that the country’s population would start to shrink before 2025, according to state-run news outlet Global Times.

Earlier forecasts expected the decline to begin in 2027.

The Shanghai Academy of Social Sciences team predicts an annual average decline of 1.1% after 2021, pushing China’s population down to 587 million in 2100, less than half of what it is today.

While decades away, that will be catastrophic for China, and its global role.

Some argue that CCP Chairman Xi Jinping’s obsession with reaching world dominance in the next decade or two is that he is racing against China’s demographic time bomb.

However, other than wait and hope the trends continue, there isn’t much the West can do about this long-term structural weakness.

A related but more short-term weakness is China’s limping economy.

After decades of overheated growth, aided by the West, and partly built on smoke and mirrors, the CCP is now facing a Chinese economy in crisis.

CNN’s ‘Meanwhile in China’ newsletter reports that:

China is beset by severe economic problems. Growth has stalled, youth unemployment is at a record high, the housing market is collapsing, and companies are struggling with recurring supply chain headaches.


The world’s second-biggest economy is grappling with the impact of severe drought and its vast real estate sector is suffering the consequences of running up too much debt. But the situation is being made much worse by Bejing’s adherence to a rigid zero-Covid policy, and there’s no sign that’s going to change this year.


Within the past two weeks, eight megacities have gone into full or partial lockdowns. Together these vital centers of manufacturing and transport are home to 127 million people.

Considering the danger of such a prolonged economic downturn, why is Chairman Xi willing to accept it?

According to Craig Singleton, senior China fellow at the Foundation for Defense of Democracies, a Washington DC-based think tank:

Beijing appears willing to absorb the economic and social costs that stem from its zero-Covid policy because the alternative — widespread infections along with corresponding hospitalizations and deaths — represents an even greater threat to the government’s legitimacy.

In 2020, Xi proudly, and prematurely, proclaimed that China’s success in containing its own virus was proof of the CCP’s superiority” over Western democracy.

CNN righty adds: “For Chinese leader Xi Jinping, maintaining that legitimacy is more vital than ever as he prepares to seek a norm-breaking third term when the Communist Party meets for a key congress next month.

And Xi may be willing to address the economic crisis after his future is assured following the party congress.

However, as Singleton notes in CNN: “Even then, the Party is running short on both time and available policy levers to address many of the most pressing systemic threats to China’s economy.”

“We are unlikely to see the economy repeat the previous high growth of 5.5% or 6% for the next two years,” said Raymond Yeung, chief Greater China economist for ANZ Research.

Let’s hope this economic crisis continues for at least the next two years, if not much longer.

And the United States and its allies should use every tool in their economic warfare kits to damage the Chinese economy well beyond its own self-inflicted injuries.

Sanctions and restrictions on tech transfers, especially in semiconductors, are some ways. But it’s time to be more aggressive and creative.

Our economic warfare against Russia over its invasion of Ukraine should provide a template.

While we aren’t ‘officially’ at war with China yet. It is time we realize that in the eyes of Xi, the CCP, and the PLA, the war against us began a long time ago.

And we only have a few critical years to keep them from dominating us and the world, before their demographic time bomb begins to explode in a a few decades.

Let’s use this short time wisely.

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21 days ago

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