The Cracks in China’s Rise
The same strengths that have powered China’s remarkable rise also explain its greatest weaknesses.
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Yascha
China has a lot of strengths. From the hardworking ethos of its citizens to the high modernist attitudes which allow it to pursue ambitious goals, this ancient civilization has a lot going for it. Anybody who is tempted to dismiss the country as a sclerotic mess should reconsider their priors (preferably by reading my recent piece on China’s strengths.)
But even as my visits to China gave me real admiration for what the country gets right, they also alerted me to its significant weaknesses. So here, in the same spirit of candor, is my enumeration of the challenges the country faces. I hope that my Chinese readers, understandably leery of yet another 外国人 (foreigner) opining on their country, will see my honest enumeration of its strengths as a reason to give a similarly open-minded hearing to my honest impressions of its weaknesses.
Hardship
Perhaps the thing that most struck me when visiting China was the extent to which a huge share of the population still leads lives of great hardship.
Take the many taxi drivers with whom I chatted in Shanghai. Many of them are migrant workers whose homes are hundreds or thousands of miles away. They live in makeshift dormitories with their middle-school friends on the far outskirts of the city. While they are legally allowed to be in Shanghai, they lack the 户口, or residence permits, which would give them access to local hospitals or allow them to send their children to local schools. As a result, nearly all of them have a wife and kid back in their 老家, or ancestral village. Unless that town happens to be unusually close, they go home once every 12 months, during Chinese New Year. For the most part, they see their families less than one week out of every fifty.
Until a few years ago, this was a deal that many migrant workers were willing to accept. They expected that a period of such hardship would come with big benefits down the road. It would allow them to save up enough money to buy a nice property back home, and their kids would likely climb the economic ladder. But since current economic conditions are far from rosy, many of the taxi drivers with whom I spoke have lost that optimism. They now fear that they are stuck with their hard lives for the foreseeable future, and that their children may not fare any better than them.
This is reflected in the one phrase I heard from virtually every single driver with whom I spoke: “压力很大” (“The pressure is really high”). The cost of living in Shanghai has gone through the roof. It has become more expensive for cab drivers to rent their cars. Fares are cheaper than in the past. Property in smaller towns is no longer as affordable as it once was. Economic opportunities for their kids are drying up. The math is no longer mathing.
Migrant cab drivers are one striking example of a profession in which the economic optimism of what some have called the 发烧年代, or fever years, is slowly seeping away. There are many others. Armies of delivery drivers risk their lives on mopeds to eke out a meager living. Scores of factory workers put in punishing hours in difficult conditions. Millions of shopkeepers press their families into service for tiny profits. And while the rural population has rapidly dwindled, tens of millions of peasants are still struggling to make ends meet on their small patches of land.
China has over the course of the last decades lifted untold millions out of extreme poverty. This really is an economic achievement without parallel in human history. But while even the lives of the people at the bottom of Chinese society have vastly improved, there remain, for now, hundreds of millions of Chinese whose lives are much harsher than most Americans or Europeans can begin to fathom.
Inequality
The other side of this coin is, of course, the newfound affluence of a proportionally small but numerically vast upper and upper-middle class.
China’s bigger cities now feel fully “first world.” To point out that their nicest parts equal the wealth of many Western cities would be an understatement; the endless parade of Rolex and Hermes and Prada and Louis Vuitton and Cartier stores on 南京路 (Nanjing Road), Shanghai’s main shopping street, outshines the riches on display on Fifth Avenue or the Champs-Élysées. But just as in Europe and America, the growth of wealth at the top comes with significant discontent of its own, especially for those college-educated professionals who didn’t hit the financial jackpot during the gold rush of the fever years, and now have to compete for sparse positional goods.
Because cheap labor is abundant, food and many services remain comparatively inexpensive in China. The convenience of living in the country, for which the most credulous expats credit the country’s rapid adoption of technology, has more to do with the fact that the people cooking your meals and delivering your packages are probably making a few bucks an hour. This provides luxuries which upper-middle class Chinese, not just Western expats, now take for granted.
But there are other traditional markers of an upper-middle class life that even highly successful Chinese are finding it increasingly hard to afford. Most importantly, rents in the country’s real centers of economic opportunity have grown enormously over the course of the past decades. If you take into account that the wages of a lawyer or a doctor or even a computer programmer remain much lower in China, graduates of elite universities find it no easier to afford a decent apartment in Beijing or Shanghai than recent graduates of prestigious colleges do to rent an apartment in London or New York.
The rising cost of quality services adds to the financial pressure. If you have the right residence permit, the country now provides you with some basic services. But those who can afford it usually pay to access higher-quality care: They end up paying large sums for private childcare, private schools, private hospitals, and private retirement homes. When you listen to the complaints of upper-middle class people with prestigious jobs, you may as well be speaking to a Brit or an American lamenting how little they have left after paying for day care, a mortgage, and health insurance.
As a result, the two halves of China’s highly unequal economy are now, as one local interlocutor told me, locked in a strange state of mutual envy. The poor, still very limited in the amenities they can afford, envy the material comforts of the rich. The rich, squeezed by intense competition and skyrocketing prices, envy the—supposed—simplicity of life enjoyed by the poor.
Disenchantment
A growing number of young people are deeply disenchanted with the difficulty of winning the rat race. They are also beginning to suspect that those who prevail in the fiercely competitive system don’t get adequate rewards. While their elders may have aspired to a corporate lifestyle, they increasingly feel that it isn’t worth working a 996 schedule1 if you can’t even afford to rent a nice apartment.
Some are starting to opt out. Inspired by a viral 2021 blog post, the extreme form of opting out has come to be described as the 躺平 (lie flat) movement. Some talented young people are completely refusing to partake in the high-pressure work culture in a manner that is reminiscent of Bartleby’s famous refrain “I would prefer not to.” But what I have found to be much more common on my latest visit is a milder form of non-compliance.
普通话, literally the “common man’s language,” is the regular Chinese way to refer to standard Mandarin. What many young people I spoke to said they aspired to was, by extension, a 普通生活, or a “common man’s life.” Good jobs, one Chinese person in his twenties told me, are too hard to come by. The rent is too damn high. The work culture is too taxing. He would, he said, much rather go back to the fourth-tier city in which he grew up, live with his parents, and take a secure job in the public sector—say, by running a local branch of the post office.
People like this are not refuseniks like Bartleby. Nor do they have the carefree spontaneity—perhaps one would nowadays call it the spirit of YOLO—of a Ferris Bueller. What they seek is pliable mediocrity. (I’m not sure a Western role model for this exists. Perhaps a mix of Ron Swanson from Parks and Recreation and Peter Gibbons from Office Space comes closest.)
This is a stark contrast to a few years ago. Back then, just about any graduate from an elite university in a first-tier city like Shanghai or Beijing would have aspired to get a job in the metropolis, to gain a local residence permit, and to make a career for themselves at a big private company.
Many companies are starting to feel the effect of this transformation. When I had dinner with a small group of high-powered female executives in their late thirties, they spontaneously brought up the micro-generational differences between them and those who are ten or fifteen years younger; sounding a little like middle-aged American bosses complaining about the work ethic of Gen Z, they lamented how hard it has become to motivate their junior staffers.
Depopulation
For a country to replace its population from generation to generation, every woman needs to have about two children. Many industrialized countries have fallen perilously short of that target over the past decades. The fertility rate in the United States now stands at 1.6, that in Sweden at 1.4, and that in Italy at 1.2. But according to most estimates, China’s fertility rate is even lower: in 2024, it appears to have fallen to a record low of 1.0.
These figures suggest that the country’s population has already peaked, and will fall very quickly over the coming decades. According to the “medium” scenario of the United Nations, the country’s population will fall from 1.4 billion today to 767 million by the end of the century. But as demographers like Dean Spears and Michael Geruso have argued, the UN’s projections are likely far too sanguine. These projections assume that fertility rates will rapidly rebound from their current lows, and have historically overestimated the size of future populations. The UN’s “low” variant, which projects that China’s population will fall to less than 500 million people by 2100, is therefore hardly far-fetched.2
China’s high degree of centralization may make it easier for the country to create policy incentives for people to have more children, and the government has started to recognize that it needs to reverse course on attempts to curb population growth. But thanks to the long decades during which the one-child policy was in effect, the norm of having few children is now deeply ingrained in Chinese culture. And on my last visit to the country, I was struck by how many young people were not only disenchanted with the promise of rising through the ranks of the corporate world; they were also extremely skeptical about their prospects for romance and marriage.3
Soft Power
You probably know Xi Jinping, Lang Lang, Ai Weiwei, Jack Ma, or Jackie Chan. Now, here’s a challenge: Name two or three other living Chinese people—excluding any personal acquaintances or Western celebrities who merely happen to be of Chinese origin.
No luck?
You’re probably not alone.
China is a rich and ancient culture. It has a storied literary tradition and a wonderful cuisine. But, so far at least, its cultural pull is astonishingly weak. Even in an era in which Japanese anime and Korean pop have become hugely popular among young people in the West, Chinese culture is leaving a surprisingly small footprint in the world. And while untold millions of young people across the West spend hours on TikTok every day, very little of the content they consume on the platform is produced in China.
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There are many reasons for this. Mandarin is an extremely hard language for anybody whose mother tongue isn’t tonal. Extensive censorship is sapping the creative energy of Chinese artists. Most forms of mass entertainment are still directed at a comparatively poor population mostly interested in escapism.
But whatever the precise mix of reasons, the lack of cultural pull will likely make a difference in the global competition between China and the United States. For now, at least, young people around the world are more likely to dream of going to New York than of going to Beijing. And they are much more likely to encounter Western rather than Chinese values in the shows they watch on their cell phones. In the global competition for hearts and minds, the West, for now, retains a significant head start.
Allies
The United States is—or at least, until very recently, was—surrounded by friends. The country has long enjoyed a close alliance with its neighbors to the north and south. It has strong bonds with the countries on the other side of its major oceans. Even in places that are much further afield, from Australia to South America, it maintains close alliances.
China, by contrast, is practically surrounded by countries with which it has rocky relationships. The country has active border disputes with India and Bhutan. It shares a deep historical enmity with Japan and Vietnam. It maintains comparatively friendly relations with countries such as Kazakhstan and Afghanistan, but there are both deep cultural differences and significant sources of strategic conflict. Even the relationship with Russia has historically been rocky, with both countries sharing a deep skepticism of Washington but mistrusting each other’s intentions. That leaves places like Myanmar and North Korea, hardly the great powers of the future, as staunch allies of Beijing.
Divisions
Since the dawn of democracy, the best argument of its critics has stayed more or less the same: whether in its ancient Athenian or its modern American form, democracy is said to exacerbate divisions, and to turn citizens into fervent partisans of their own side. There is a good reason why the overriding concern of the Founding Fathers was with the dangers of faction—and if you look at America today, it is tempting to conclude that all the brilliant mechanisms they put in place to control that problem have not worked out nearly as well as they would have hoped.
In autocracies, internal divisions are usually less visible. This has some genuine advantages. When social splits are less salient, political entrepreneurs don’t have an incentive to animate ordinary people to hate those who fall on the other side of the partisan divide. But it would be a mistake to jump to the conclusion that divisions which are less salient don’t exist at all.
China is no exception. Since the founding of the People’s Republic, there have often been rival cliques and factions, sometimes motivated by different ideological predilections, and sometimes by the personal networks to which senior politicians owed their ascent. During the Maoist Era, the party was split into pragmatists like Liu Shaoqi and radicals like the Gang of Four. After Mao’s death, the Party was torn between reformists like Deng Xiaoping and conservatives like Li Peng. In the early decades of this century, the main division was more personalist: it pitted the so-called Princelings whose fathers had played a preeminent role in the 1949 revolution against more technocratic officials who had risen through the ranks of the Communist Youth League.
At present, one leader has amassed so much power that these divisions are hidden from view to an extent that is unusual even in an autocracy. But invisibility does not equal inexistence. And the nature of autocratic regimes is such that even a temporary absence of such divisions rarely lasts forever.
Isaiah Berlin argued half a century ago that you shouldn’t expect all good things to go together.
This is true in individuals. You might love some friend of yours because he is fun and spontaneous. If you also expect that same friend to be neat and reliable, you’ll probably get frustrated with him sooner or later.
It is also true in countries. I love that Italian culture is so warm, that people spend so much time socializing with each other, and that they often put the needs of their friends or neighbors above abstract rules. But all of these things are of course deeply related to some of the things that make me sad about the country, including its economic stagnation and the severe lack of opportunities for ambitious young people.
A similar insight holds true for China’s considerable strengths, which I enumerated in the first installment of this mini-series, and its weaknesses, to which this article has been devoted.
The impressive work ethic of hundreds of millions of Chinese people allows its companies to outshine many Western competitors; but it is also a reason why so many young people are tempted to opt out of the rat race, insisting that they want little more than a common man’s life. The country’s high modernist ethic allowed it to build tens of thousands of miles of high-speed railway tracks in the course of a couple of decades; but it is also the reason why one year’s favored industrial sectors reliably seem to turn into next year’s sources of waste and overproduction. The country’s extent of centralization creates a giant market increasingly united by shared norms and a common language; but the extent to which local cultures and languages are being flattened also contributes to a growing sense of alienation.
None of this should be surprising. When countries are in their first spurt of growth, the advantages of the model are often evident, and its shortcomings invisible. It is when they mature, and the problems they need to solve become increasingly complex, that the drawbacks come into view.
Critics of America often miss this when they point to all the things that are inefficient or irrational in the country without recognizing that those same features are often inextricably entwined with what has made the country great. As China’s challenges come into sharper relief, its critics would similarly do well to bear in mind that the country has both serious weaknesses and great strengths—and that those, too, are intimately intertwined.
The Case for China’s Strength
A lot of Western commentary about China is framed in terms of zero-sum conflict.
Peter Hessler on China
Peter Hessler describes how China has changed over the last 30 years—and where it might go next.
Many Chinese workers, especially in more prestigious jobs, are expected to be in the office from 9am to 9pm, six days a week.
Something similar holds for most other countries that currently have very low fertility rates, including much of East Asia, North America, and Western Europe.
I hope to write a full article about that topic soon; watch this space.
When you connect two car batteries to each other, the one with the lower charge will take from the stronger charge to eventually equalize. The US was the massively stronger battery, and with the allowance of China into the WTO, we connected an extraordinarily weak battery that would serve to both increase the overall charge of both batteries, but while depleting the strength of the US battery to help China's grow more equal.
The problem here was that the basis for the US allowing this connection with China was only for US corporate profit maximization and corporate primacy. Because without the push from Wall Street, those few administrative elites that mistakenly expected the CCP to adopt western style democracy would have never gained enough support to make that connection.
The US economic power was a product of its system of governance and its people that leveraged the system... the idea that is the basis for its existence... the right to pursue self-interest. China could never become what it is today without looting that battery power... it never had the system that inspired or allowed enough individual creative freedom, enterprise and entrepreneurialism. Apple spending $500 billion per year to train China to become a tech industry competitor works well for China, but what happens when Apple stops doing that?
The CCP is paranoid of the West. They loot from it not to become a partner, but to insulate themselves from the threat of the West. That includes continued authoritarian policies to prevent Chinese people from aligning with the West, and thus also preventing the Chinese people from aligning with the required ethos of creativity that drives industrial dominance.
It is unlikely that China will continue to hold their position growing to dominate the world economy as the US pulls back and disconnects the battery.
This is a great essay, but I find it disconcerting that you, of all people, can write about China at this depth while skirting the fact that it is, at its core, a communist and authoritarian state. Your career has been defined by sounding the alarm on authoritarian threats in the West; surely the sheer size of that issue, insofar as it so obviously applies to China, deserves acknowledgment here.
Given Stephen Kotkin’s prominence — and the broad political spectrum of intellectual consensus his China doctrine commands — it feels strange for a political scientist with your leanings to leave that perspective unaddressed. I would also be very interested to hear your take on the Clinton doctrine that justified opening trade with China, now that we’ve had decades to test its premises against reality.
And before the pile-on begins (or the silent treatment, which i suppose is worse): yes, I’m well aware of the perspectives of Lawrence Summers and Jeffrey Sachs, and many others, and I sense you may be writing from somewhere in that neighborhood. But that’s exactly why I’m pressing the point. What I’m hoping is that you — and perhaps some of your readers who are serious thinkers and subject experts — can help this plebian sort out how to think about the tension between those doctrines and perspectives, and how you yourself categorize the authoritarian threat that China represents.
I worry that U.S.–China alignment could well prove to be the most consequential and challenging geopolitical issue of our time — which is really saying something. Your background and reputation put you in a position where your voice could be especially influential and important on this front.