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China’s decline became undeniable this week. Now what?

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For years I have written articles predicting China’s decline. This week, the decline has become undeniable. The descent will not be easy, neither for her nor for us.

The news is that China’s death rate has exceeded the birth rate for the first time in more than 60 years. The last time was the famine caused by Mao Zedong’s economic policies which resulted in an estimated 36 million starvation deaths. Today, it is young Chinese couples who, like their peers in most developed countries, do not want children.

So far, the population slowdown has been small – 9.56 million births last year compared to 10.41 million deaths, according to Chinese government statistics. That’s out of a total population of 1.4 billion. The country will not run out of population anytime soon.

But the longer trendlines look terrible for Beijing. In 1978, when Deng Xiaoping’s economic reforms began, China’s median age was 20.1. In 2021, it was 37.9, surpassing that of the United States. China’s fertility rate is 1.18. The replacement rate needed to maintain a stable population is 2.1. In 2018, there were about 34 million more men in China than women – the result of a one-child policy that led couples to abort girls at a higher rate than boys. China’s working-age population has been shrinking for years; a government spokesman estimated that it will fall to 700 million by mid-century.

If you think the world is already too crowded, then all of this might sound like good news. It’s not. China is increasingly likely to grow old before it gets richer, condemning hundreds of millions of Chinese to a poor and often lonely old age. A declining population is generally correlated with economic decline — a drop of about one percentage point in economic growth for every percentage drop in population, according to Ruchir Sharma, former head of emerging markets at Morgan Stanley. And China, both as an export hub and as a vast market, has been a major engine of global economic growth for four decades. Its weakness will affect the global economy.

But the scariest aspect of China’s decline is geopolitics. When democracies experience economic problems, they tend to withdraw into themselves and not take risks. When dictatorships do this, they often become outward-looking and risk-prone. Regimes that are unable or unwilling to respond to domestic discontent with political and economic reform often attempt to do so through adventures abroad.

It’s a point worth pondering now that Beijing is also recording the slowest rate of economic growth in nearly four decades. The immediate cause here is Xi Jinping’s catastrophic mishandling of the Covid crisis – the punitive lockdowns, the rejection of foreign vaccines, the abrupt end of restrictions, the constant lying.

But China’s economy was already struggling before the pandemic: a housing bubble about to burst, record capital flight, the end of Hong Kong as a relatively free city, and increasingly unwelcome Chinese companies like Huawei. in Western countries because of espionage. and issues of intellectual property theft.

A pragmatic government could have met these challenges. But Mr. Xi has appointed a swathe of yeses to the Politburo for his unprecedented third term as supreme leader. If – or as – economic conditions deteriorate, they are more likely to find answers to their problems in aggression rather than reform. Think of inflationary Argentina on the eve of the invasion of the Falklands or bankrupt Iraq just before the invasion of Kuwait.

What should the United States do? Three things.

First, deterrence. The better Kyiv fare militarily against Moscow, the deeper the lesson will be learned in Beijing that taking Taipei would not be as easy as it looks. The sooner Taiwan acquires large stockpiles of easy-to-use, hard-to-target weapons such as Stinger and Javelin missiles, the more Chinese military planners will be reluctant to step on an urchin. The more the United States does to help Japan, Australia and other allies build up their militaries, the greater the chilling effect on China’s regional ambitions.

The administration is already doing a lot. He needs to do more, much faster.

Second, commercial relaxation. Trying to punish Beijing via Donald Trump tariffs worsens the relationship while economically hurting both parties. We should offer to cancel them in exchange for guarantees from China that it will end its hacking campaigns against American institutions.

If he cheats, the rates can be reimposed and doubled.

Finally, human rights. At every opportunity, the State Department should speak out loud and clear for Chinese dissidents. Jimmy Lai and Qin Yongmin, among others, should be as familiar to Americans as Andrei Sakharov and Natan Sharansky were in the 1970s. Their names should be brought up at every bilateral meeting with Chinese officials, not just out of concern for their life, but also to remind us that our fundamental differences with Beijing are not strategic. They are moral.

In the long run, the greatest hope we can have for China is its people. The greatest investment we can make in the turbulent decades to come is to trust them.

nytimes Gt

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