China’s reverting to pessimism as the U.S. rises to the occasion with Ukraine. Shifting power allows the U.S. to restore balance by pursuing optimistic foreign policy.

During the first two decades of the twenty-first century, China continued to act as an optimistic great power. The Chinese economy was growing rapidly, Beijing’s security environment was improving, and the country’s citizens were becoming more educated than ever before. (Even today, public opinion polling suggests that the Chinese are more optimistic about the future and more confident that their country is headed in the right direction than are the people in any other major economy.) This self-assurance fostered strategic patience and a focus on the long term. Beijing sponsored Confucius Institutes abroad to bolster its image and soft power. It invested in a long-term diplomatic strategy to reduce Taiwan’s international recognition. It developed wedge issues to play the United States and the European Union off each other, all while generating goodwill in the “global South.” China began creating global governance structures that could potentially challenge the liberal international order, including the New Development Bank, the Asian Infrastructure Investment Bank, and the Belt and Road Initiative.

Over the same period, U.S. expectations darkened. The 9/11 terrorist attacks, the disastrous Iraq war, and the 2008 financial crisis all challenged Americans’ faith in the future. According to Gallup polling data, the last time a majority of U.S. respondents believed that their country was headed in the right direction was January 2004. A quick review of recent presidential inaugural addresses hints at this escalating pessimism. In 2009, amid an economic crisis and war, U.S. President Barack Obama stressed the need to “begin again the work of remaking America.” President Donald Trump’s rhetoric in 2017 was more hyperbolic, decrying the “American carnage” of the previous eight years and promising to “protect our borders from the ravages of other countries making our products, stealing our companies, and destroying our jobs.” In his inaugural address in 2021, President Joe Biden acknowledged that “few periods in our nation’s history have been more challenging or difficult than the one we’re in now.”

Despite growing U.S. pessimism, China largely managed to avoid confrontation. By acceding to the U.S.-led “war on terror,” China was able to rise while the United States stayed focused on more immediate dangers. China was also patient enough to invest in global governance structures that few U.S. officials viewed as imminent threats. Beijing’s future looked bright, so it felt no need to immediately challenge U.S. hegemony. China needed only to bide its time.

As Chinese leader Xi Jinping consolidated his grip on power, however, Beijing’s optimism began to wane. China has had below-replacement birthrates for 30 years, and recent government efforts to boost these numbers have fizzled. China’s population just recorded its slowest annual growth rate in decades, and its migrant worker population fell in 2020 for the first time since data collection began. Compared with the United States, China faces a severe demographic crunch. It now seems likely that the country will grow old before it grows rich. At the same time, China’s draconian zero-COVID policies have soured public opinion in urban areas such as Beijing and Shanghai.

China’s economic outlook has also become more bearish in recent years. Although the country’s growth between 2000 and 2010 was extraordinary, its slowdown over the past decade has been equally sharp. China’s GDP growth has fallen from a peak of 14 percent in 2007 to something closer to two percent in 2020. China’s total productivity growth has decreased by half since the 2008 financial crisis, prompting the political scientist Denny Roy to describe China as a “low productivity superpower.” China’s debt-to-GDP ratio, moreover, is nearly three times that of the United States. The country’s future economic growth looks even less promising given Xi’s failed reform efforts. As the economist Daniel Rosen observed in these pages in 2021, “An honest assessment of recent setbacks suggests that time is running out. . . . There are at most a few years [for China] to act before growth runs out.”

These trends are a cause for concern. Relations between countries are most unstable when all the leading powers have pessimistic expectations—a situation that threatens to characterize the coming decade of great-power politics. China and the United States have adopted negative worldviews, and there is reason to fear that their outlooks could darken even further. Both countries are getting older. Immigration to the United States, the traditional source of demographic strength for the country, has dried up, according to the U.S. Census Bureau. By one estimate, there are currently 1.8 million fewer working-age immigrants in the United States today than there would have been if pre-2020 immigration trends had continued. Even more disconcerting, ongoing systemic shocks—the COVID-19 pandemic, financial turmoil, global supply chain bottlenecks, political polarization—will only feed a crisis mentality that invites short-term thinking.

Look on The Bright Side

Successful U.S. support for Ukraine could be a game-changer, however. For the first time in years, the United States has demonstrated policy competence during a global crisis. Ukraine’s stout resistance and its identification with Europe and the United States have reminded everyone, including Americans, that U.S. soft power and structural power persist. After decades of rhetoric about American decline and a democratic recession, U.S. policymakers can now speak of restored alliances and a determination to strengthen the liberal international order. Perceptions of U.S. hegemony might be starting to shift in a more favorable direction.

If American officials believe that the future will be more favorable than the present, then perhaps they can focus on reinforcing the liberal international order that has advanced U.S. interests for decades. Less concerned about immediate threats, Washington might be able to reemphasize long-term objectives, such as reversing democratic backsliding and building a resilient set of rules for the twenty-first-century global economy. Despite rising Chinese pessimism, a strong United States, confident in its future and its role in the world, could retake its historic position within the international system. An optimistic United States will fortify international institutions and offer a bridge to countries in the global South—including China—that are interested in joining the order as responsible stakeholders. If, however, the great powers succumb to pessimism, then all bets are off, and the world will face a dangerous decade.