Why China will become more aggressive

China’s rise as an economic and military power was nothing short of phenomenal. Many believed that the Chinese century was upon us and that it was only a matter of time before China surpassed the US as the world’s predominant superpower.

But as they say, fates of nations move in cycles – what is on an upswing today will inevitably be on a downward path tomorrow. Unlike most empires whose rise and fall took place over centuries, China’s cycle is happening in just a matter of decades. The communist nation has already seen its peak and sadly, has started to decline even before it has become a bona fide world empire.

Conditions that caused China’s rise

Five conditions contributed to China’s meteoric rise. The first is the assurance of security. China’s geopolitical position faced no threats since the end of the Vietnam war despite being surrounded by 19 countries, many of whom are powerful, unstable or both. The assurance of security allowed the Chinese Communist Party (CCP) to focus on its economy.

Second, China was ushered into the global economy, thanks to the US. Leveraging on its huge population and low labor cost, China rode the wave of ever-increasing global trade brought about by US-led trade liberalization.

Third, the government of Deng Xiaoping opened the economy and adopted capitalist policies. State control was eased, allowing the flow of foreign investments. Industries were created and infrastructure was built. Presidents Jiang Zemin and Hu Jintao provided continuity to Deng’s policies amid a politically stable environment.

Fourth, when China opened itself to trade in 1978, the country enjoyed a demographic advantage where baby boomers filled the workforce. Back then, there were 15 workers for every retiree.

Fifth, China was nearly self-sufficient in food, metals and wood, water and energy. This made manufacturing cheap.

The fall

But a confluence of bad policies under the leadership of Xi Jinping as well unavoidable circumstances have conspired to foil China’s meteoric rise. Among Xi’s damaging policies were the abandonment of free-trade mechanisms in favor of rigorous state control, stringent anti-espionage laws, debt-driven growth and bad behavior in trade and geopolitical relations. Unavoidable circumstances include a rapidly aging population and depleting natural resources.

China is running out of people. Its baby boom generation is retiring and the one-child policy generation have taken over. Over the next decade, China will lose some 70 million people from its workforce while gaining 130 million senior citizens. The worker-to-retiree ratio will be a perilous 2:1 within the next 10 years.

Exacerbating matters is the country’s rapidly depleting natural resources. Half of its rivers have dried up and much of its underground water is deemed unfit for human consumption. China has as much water supply as Saudi Arabia today. Consequently, China has become a net importer of food. It has also become a net importer of oil, gas and coal. Importing raw materials has driven up manufacturing costs.

Foreign direct investments have plummeted due to Xi’s stringent anti-espionage laws relating to foreign investors. Capital flight in the trillions of dollars has occurred, not only among foreign firms but also Chinese citizens who wish to move their money and families to safer havens.

In trade, stiff tariffs were imposed on Chinese exports due to unfair subsidies and product dumping. This has curtailed China’s access to key markets like the EU and US. Trade cooperation has turned into trade wars.

The geopolitical security China once enjoyed is now under threat. Xi’s hegemonic ambitions caused China to embark on a spate of extrajudicial territorial grabs, all of which threaten regional security. As a result, America and its allies have banded together to encircle China. The threat of armed conflict looms.

Despite the headwinds, Xi is unable to course correct. This is because Xi has always favored the concentration of political power on himself over economic efficiency. This was painfully evident when he imposed his Zero Covid Policy and crackdown on Hong Kong dissidents.

How declining powers act

China’s 40-year growth spurt pumped up the country’s financial and military muscle, as well as its ambitions. Xi and his cadre believe that this is the century wherein the communist nation becomes the world’s predominant superpower. But as economic reversals and geopolitical pushback work against them, they are compelled to act more aggressively. This makes them dangerous.

Domestically, China is acting more like a fascist state. This is characterized by the centralization of power and worship of the central leader; by hyper nationalism; by a culture of revenge towards nations who stand in the way of their ambitions; by intensive surveillance and severe discipline of its citizens; by blurring the lines between civil and military life and by worshiping military strength.

Economically, declining powers prioritize leverage (to gain advantages in trade) over cooperation. Leverage comes in the form of controlling vital trade routes such as the South China Sea and by hoarding the supply of raw materials like rare earth elements.

Militarily, declining powers drastically increase their military spend and act more aggressively in engagements. Military might is used to influence countries because the power of their economy (trade and loans) no longer suffices.

And because their economic and military power cannot match that of the incumbent superpower, declining powers form alliances with like-minded countries to sow destabilization. This explains China’s alliance with Russia, North Korea and Iran.

China will behave more aggressively in the coming years. It will only cool down once it realizes that it cannot compete with the incumbent superpower. Unfortunately, history shows that this realization only comes after losing a war.

China will have to abandon its hegemonic ambitions eventually. Let us hope this happens before it instigates a war.

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Email: [email protected]. Follow him on Twitter @aj_masigan.