The troubling reason America might not be far behind
While a number of stories, both at home and abroad, have taken their turn leading headlines, one of the more important and potentially troubling trends in recent months has been the continued downturn of China’s economy. I call it troubling less for what it means for the world economically—which is where much of the attention has focused—than for what it could mean for the world politically and militarily.
You see, China’s designs on becoming the world’s leading superpower, taking back Taiwan, and seeing their global influence spread while the West’s declines have not changed. To this point, however, those plans had the benefit of patience. Given the level of control President Xi exerts over the nation, they have had the freedom to choose their spots and wait for the best opportunities to act. Yet, as their economy continues to slide and the day-to-day lives of their people become increasingly difficult, that margin will begin to fade.
And, ultimately, a China that has to act could end up being a far greater threat than a China that believes time is on its side.
To that end, let’s examine why their economy has struggled and what those struggles could mean for China and the larger world.
China’s bursting bubble
Most of the global economy has had trouble bouncing back from COVID, and, in that regard, China is no different. While the nature of their top-down governance meant they could mask much of that struggle during the pandemic’s initial years, doing so simply pushed the problem down the road and exacerbated it once the bubble burst.
As such, the latest data demonstrates a decline in the world’s second largest economy that has many around the globe worried. In their most recent report, the National Bureau of Statistics found that:
- Unemployment rose for the first time since February
- Growth in industrial production has slowed despite attempts to prop it up
- Investment in real estate has fallen by 10.2 percent so far this year when compared to 2023’s already-declining market
This is despite the government announcing plans to spend 150 billion yuan—roughly $20.9 billion—in government debt to buy back older versions of appliances, cars, and other consumer goods to stimulate new spending. Even attempts to subsidize lending by providing Chinese banks with $42 billion to help state-owned firms buy excess homes and buildings have failed to make a difference.
And there is little to indicate that the situation will improve anytime soon.
A population in decline
While China’s strict COVID restrictions played a large part in changing the nation’s economic forecast, many of the trends at the heart of its decline have been around for far longer. And perhaps none will play a larger role going forward than its declining population.
While China’s one-child policy technically ended in 2015, they have continued to see a dearth of births, with 2023 marking the second straight year that the general population has declined. That two-year stretch—one likely to continue for the foreseeable future—marks the first time China’s population has fallen since the Great Famine of the early 1960s. As such, the country’s population is expected to be nearly cut by half—roughly 732 million people—by the end of this century.
Yet, the pain of that decline will not be felt equally. The impact of the low birth rate is compounded by a population that will continue to live far longer than they can work.
China’s retirement-age population—those 60 and older—is expected to grow to 400 million by 2035, which, for comparison, is substantially more than the entire population of the United States. That means even more of the stress and burden of maintaining their society will fall on those still able to be part of the labor force. Many of them cite such burdens as one of the chief reasons they simply can’t afford to have kids, thereby perpetuating the cycle.
And, unfortunately, what’s happening in China may be coming to our shores soon.
America is not immune
While America’s economic struggles may not mirror those in China, we share a similar issue regarding our declining birth rate and the problems it has already started to create. And we’re not alone.
I wrote more about the dangers of our decreasing population in a recent article, but fertility rates are currently below replacement level in more than half of all countries and territories around the world. Moreover, higher-income and more developed countries typically experience the greatest rate of decline while simultaneously also experiencing the longest lifespans for their people.
For a time, it appeared that the United States would remain an outlier in this regard. While Europe and many parts of Asia saw their birth rates plummet, America maintained a level that left some room for optimism. However, that began to change around 2007, and the decline has been fairly steady in the years since.
Most attempts to convince people to have more babies—whether through tax breaks, longer maternity leave, or a host of other initiatives—have proved either insufficient or unsuccessful regardless of the country in which they’ve been tried. As such, many of the world’s most powerful nations are waking up to the reality that, in order to survive, they’ll need a fairly large influx of people from outside their borders.
As we’ve seen and discussed in recent months, however, that solution is not without issues of its own.
Consequently, governments across the developed world are left without a clear solution to an increasingly desperate problem. That’s a scary place to be, as countries like China, Russia, and even the US will grow increasingly tempted to distract their populace from the crisis rather than try to solve it. And, as we’ve seen with Russia and Ukraine in recent years, that distraction often takes the form of war.
A better place to focus
Only time will tell if history repeats itself once again, but, until we know one way or the other, our time and energy will be better spent praying for God to intervene and bring peace than worrying over the prospect of war.
After all, Jesus was clear that this world is far from perfect and will remain that way until he returns to establish a new heaven and a new earth to take its place. As such, our job is to help as many people as we can to place their faith in him between now and when his kingdom finally comes in all its glory.
How can you do that job today?
Friday news to know:
*Denison Forum does not necessarily endorse the views expressed in these stories.
Quote of the day:
“Faith is measured by your feet, not your feelings … if your feet are not walking in faith, then there is no faith regardless of your emotions.” —Tony Evans
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