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China’s Homegrown Crisis

It will be impossible to change China’s dreams, but it is possible to affect its calculations. The goal for the West ought to be to persuade China’s rulers that seeking domestic legitimacy in external aggression would be folly, and that their only real choice concerns their approach to the economy.

NEW YORK – China’s economic reality, until recently, was nothing short of extraordinary. China’s annual economic output soared from under $500 billion to $18 trillion between 1992 and 2022, with years of double-digit growth pushing annual GDP per capita from less than $400 to $13,000.

In recent years, however, growth has slowed significantly. To some extent, this was inevitable: moving hundreds of millions of people from inefficient rural agriculture to higher-productivity factory work in cities can only be carried out once.

Along the way, China received the support of the United States and much of the developed world. They invested, extended loans, and transferred technology, while welcoming China into the World Trade Organization. They also tended to look the other way when China stole intellectual property, violated its WTO commitments, and kept important parts of its economy closed to foreign competition.