China focuses on its economy to avoid American containment – the CCP will lose support if it doesn’t provide for its citizens and goes to war

[Percy, “Why China is not planning to conquer other nations” John Menadue’s Public Policy Journal, Sep. 30, 2023, https://johnmenadue.com/why-china-is-not-planning-to-conquer-other-nations-part-2/ Accessed 7.19.24 GDI-HB]

China’s focus is economic

The 2019 COVID-19 Pandemic abruptly ended the strong growth of the Chinese economy and exposed structural problems, the most serious of which was China’s dependence on debt driven property and infrastructure development. China is overbuilt given its shrinking population. It needs to deleverage property developers and the local government financing vehicles that funded them. Many Chinese who bought their apartments off the plan have lost their life savings as buildings remain unfinished.

China’s economy must shift from being investment to consumption driven for living standards to rise further. This involves improving public services (such as healthcare and aged pensions) so Chinese households won’t have to save so much for meeting unforeseen contingencies. It also means reforming taxes so that most income earners contribute towards a social welfare net. At present 80% escape taxation because of allowable deductions. And its local government (which delivers most public services) needs to wean itself of land sales to developers as a critical source of revenue.

Chinese industry must move from being labour and capital intensive to being hi-tech and cognitive based for China to escape the middle-income trap bedevilling most developing economies. And America’s ban on China using advanced semiconductor chips made anywhere in the world requires it to develop its own chip making capacity to excel in AI applications. America’s determination to decouple China from the “democratic world” requires China’s economy to become more “circular” so that it is less reliant on imports and exports with the West.

To avoid American containment, China is developing overland transport connections with Central Asia, the Middle East and Africa that are harder to be disrupted than sea lanes. Its drive to replace coal imports with solar, wind and nuclear is both for self-sufficiency and emissions reduction. Reducing air pollution is essential for ending its high respiratory diseases. Finally eliminating widespread corruption is critical to stamping out crony capitalism and self-serving mandarins.

Achieving these outcomes is necessary for reviving economic growth, attaining self-reliance and resilience while also achieving environmental sustainability and “common prosperity”. The latter refers to President Xi’s quest to reduce the huge disparity in incomes and wealth between employers and employees and city and rural dwellers. Most pressing is the need to generate extra jobs for young adults, one in five of whom are unemployed.

Success or failure in meeting these diverse challenges will decide whether the Chinese Communist Party maintains its social contract with citizens, given that its legitimacy rests on delivery, not democracy.

Doing so means avoiding war with the West, which would require diverting resources from improving people’s livelihoods and wellbeing to military personnel, equipment, and munitions.

For these reasons, and more, China is not a threat.