Watch the ‘danger zone’

The competition and clash between America and China could go on for another decade.

HAN WOO-DUKThe author is a senior reporter of the China Lab. “China’s era is coming to an end. China, an authoritarian country facing limits in growth, is becoming aggressive. China is feeling the urge to grab any chance before it is too late.”

“Danger Zone: The Coming Conflict with China,” written by Michael Beckley and Hal Brands, surmises that China, which is in crisis, will not hesitate in taking unpredictable actions. The title of the book is noteworthy as the country’s economic performance for the first half has fallen short of expectations.

The “peak” symptoms are clear. The Chinese economy’s growth engines are private companies. The two pillars of the private sector are real estate, which makes up 3 percent of GDP, and IT, which leads economic innovation. Beijing cracked down on these two industries, as they are “suspected” of hurting common prosperity, the philosophical basis of the Xi Jinping system. The recovery of domestic demand is slow and youth unemployment is rapidly rising as a result.

Another growth engine is exports. Since its reform and opening, China has been reliant on Western global supply chains to expand the size of the economy. But the economic war with the U.S. cut off China from these supply chains. Xi Jinping’s China stresses self-reliance. It even isolated itself with the enactment of the anti-espionage law. Exports can hardly remain the same.

Therefore, it sounds convincing that the turmoil for the Chinese economy is a problem caused by the limitation of the system, not the economic cycle. “See, China has hit the peak.” The authors argue that China’s three-decade golden era is coming to an end, which is also exacerbated by population decline and resource scarcity.

Some may argue otherwise. China’s economy is still growing at more than 5%. We should note that the Chinese government values “high quality development” over reckless growth. We also need to further investigate whether China really has reached the “peak” in its economic growth.

Nevertheless, the reason for paying attention to this book is that the Biden administration is following the China policy solutions proposed by the authors. “Unite the alliance, even if it is not secure,” “Break China’s monopoly of core technologies,” “Selectively attack China’s weaknesses.” All this is happening now.

China has no intention to back down. China looks for America’s vulnerable spots and strikes back without hesitation. Experts predict that Xi will stay in power for the next five years at least, which could go up to ten years from a conservative perspective. The competition and clash between America and China could go on for another decade. The authors call this period “danger zone.” When an airplane goes through this zone, passengers need to buckle up. That’s what we must do now.