Are We Witnessing the End of China’s Rise?

With its monumental shift in global politics and economics, China’s ascent in the global order has been a defining feature for decades.

With its monumental shift in global politics and economics, China’s ascent in the global order has been a defining feature for decades. No longer a developing nation in a unipolar world, China evolved into a superpower that compromised the global balance of power. Its Belt & Road Initiative (BRI) and participation in BRICS, along with rapid economic growth, increasing geopolitical influence, and
massive domestic reforms, changed global commerce and diplomacy.

However, recent developments suggest that China’s impressive ascent may be have peaked. This would have profound implications, not only for China but for the global system.

A Reversal of Fortune

Experts agree that China’s rise is no longer just slowing; it appears to be reversing. For many years, China’s growth defied expectations, propelled by a massive demographic change, ample natural resources, and a favorable global trade environment.

But these elements that had once propelled China forward are no longer capable of doing so.

The country faces mounting debt, declining productivity, and severe resource shortages. Its once-resilient economy is now laden with inefficiencies.

This inefficiency means China is spending more to produce less. Debt has swelled to levels surpassing even those of the United States, and there seems to be no end.

China’s citizens have grown increasingly pessimistic, with surveys showing growing dissatisfaction among Chinese citizens. Youth unemployment is high, and the wealthy are increasingly moving their assets and families out of the country.

The so-called ‘lie flat generation’, disillusioned youth struggling to find their place in a faltering economy, encapsulates the social and economic implications of China’s economic slowdown.

The End of Tailwinds

China now faces several challenges, including depleted natural resources, an aging population, and shrinking global support.

Its main sources of success and power are now becoming liabilities.

China also benefited from a uniquely secure geopolitical position during the last 40 years, an anomaly in its history of conflict and instability.

However, this position is eroding as geopolitical tensions rise.

China is surrounded by 19 countries, many consequential or unstable, and historically it has struggled to maintain its borders.

However, from the 1970s onward, its alignment with the U.S. against the Soviet Union and a favorable global trade environment created an era of stability. China capitalized on this to emerge as a manufacturing behemoth, enjoying the success of hyper-globalization.

China’s natural resources, once a cornerstone of cheap and rapid growth, are becoming scarce.

Water shortages, polluted farmland, and dwindling energy reserves have increased costs and made growth more challenging. Beijing’s water resources are now as limited as Saudi Arabia’s, and China is the world’s largest importer of food and energy—a stark reversal of its previous self-sufficiency.

Perhaps most significant was the demographic change. In the ‘80s and ‘90s, China had an extraordinarily high ratio of workers to retirees due to its population boom, followed by the one-child policy. This workforce drove economic growth.

However, this advantage has now reversed.

Over the next decade, China will lose tens of millions of working-age adults while gaining over 130 million senior citizens, placing immense strain on the economy.

A Global Hangover

China’s troubles carry significant global implications. Many nations have tied their economies to China, dependent on its substantial market and easy loans.

Now, the ripple effects of China’s economic challenges are being felt by numerous nations around the globe.

Countries like Germany, South Korea, Brazil and Australia, all of which once benefited from China’s insatiable demand for goods and resources, are now contending with decreasing exports. Commodity prices are falling, and nations heavily indebted to China are in financial distress as Beijing demands immediate repayment.

China’s economic strategies are also exacerbating tensions as it has flooded global markets with subsidized exports to sustain itself, blocking domestic producers in other countries.

This has strained trade relations and fueled anti-China sentiment worldwide. Nations that once courted Beijing for its economic promise are now distancing themselves due to its harsh trade policies and assertive geopolitical posturing.

Peaking Power

China’s reaction to these challenges mirrors history. As a “peaking power” – having reached its zenith and now facing stagnation – China is showing
signs of increased domestic repression and external aggression.

Historically, peaking powers do not accept their fate; instead, they often clamp down on dissent at home and expand militarily abroad.

China’s actions under Xi Jinping are no exception.

He and his government have intensified their control over society, from surveillance and censorship to ethnic repression, most notably against the Uyghurs.

Beijing is also pursuing an aggressive military buildup with the aim to expand its influence in disputed regions like the South China Sea and the Taiwan Strait. It has used its expanded military budget to invest heavily in advanced technologies, nuclear weapons, and naval capabilities.

The military’s aggressive behavior, from water cannon skirmishes with the Philippines to border clashes with India, reflect a disappointing inclination to take risks to secure its strategic interests.

The New Economic Strategy

China has shifted its focus from growth to leverage as it faces economic stagnation. It aims to control crucial segments in the global economy, such as rare earth minerals, advanced manufacturing, and strategic trade routes like the South China Sea.

It has paired this approach with a willingness to use economic coercion, as seen in its trade disputes with countries like Australia.

Yet, while this strategy may provide short-term advantages, it is only isolating China’s global trade partners.

This combination of economic stagnation and geopolitical pushback has now created a dangerous situation.

U.S.-China relations are becoming increasingly hostile, with many issues ending in
zero-sum rather than a win-win for both nations.

Historically, rivalries between nations often end in significant shifts in the balance of power, usually through conflict.

While a cold war between the U.S. and China could remain stable, the risk of military escalation is real. Both nations are heavily armed and ideologically opposed, and one miscalculation by either side could result in ruin for both.

The Path Forward

Despite these challenges, a peaceful resolution is possible.

If not Xi Jinping himself, then perhaps China’s next generation of leaders will recognize the need to prioritize domestic stability and economic reform over geopolitical ambition.

Similarly, the U.S. and its allies could find ways to engage China constructively while maintaining firm boundaries. Much will depend on the decisions of future Chinese leadership and the ability of the global community to navigate this critical period without resulting in open conflict.

Today, the world must adapt to a reality in which China’s rise is diminishing. The era of rapid growth and easy economic partnerships is over, replaced by a more complicated and charged dynamic.

Whether this marks the beginning of a new and peaceful chapter, will depend on how Beijing, the U.S. and the rest of the world respond to the challenges ahead.

Gerald Walker
Gerald Walker
Dr. Gerald Walker is a prolific writer in several popular publications on the topic of world politics and international diplomacy. On occasion, he is invited as a guest lecturer to speak on university campuses.