October 1, 2021 Reading Time: 5 minutes

China has become the latest all-purpose excuse for new spending and regulation in Washington, D.C., and not just for the military. In June, the Senate approved the 2,400-page “Strategic Competition Act of 2021,” which spreads cash far and wide to American industry in the name of confronting the Chinese menace, essentially a revamped version of the old Yellow Peril that generated panic and discrimination in the 19th century.

Beijing appears likely to replace the so-called Global War on Terrorism as the most common go-to justification for bigger government. During the Cold War, the Soviet Union was the preferred excuse for new and more expensive programs. For a few years, saving Americans from energy shortages constituted a favored “moral equivalent of war.” The 1960s featured the War on Poverty, supposedly to uplift America’s downtrodden.

All these issues present real problems. However, they are invariably more complex than advertised. Many of the proffered remedies are anything but. Indeed, government often created the underlying problem or made it worse. And the political rentier class, always on the lookout for ways to mulct the rest of the population, routinely takes advantage of “crises” real, exaggerated, or imagined for its own benefit.

Now the People’s Republic of China is the new bogeyman. Established in 1949, Mao Zedong and the Chinese Communist Party created a hell on earth. Millions died as the CCP consolidated power. Tens of millions were killed—most starved to death—in the misnamed Great Leap Forward. Hundreds of thousands, or even millions died in the following Great Proletarian Cultural Revolution, part party purge, part civil war, part psychopathic murderfest.

Then Mao died in 1976. And China changed.

The U.S. and PRC established diplomatic relations. China joined the international trading system. Chinese people gained personal and economic freedom. Beijing’s politics remained authoritarian, but the controls were loose, as long as the CCP was not directly challenged.

China changed again when Xi Jinping took over almost a decade ago. Touted by some as a reformer, he made himself into a pale version of Mao, crushing the Chinese people beneath renewed dictatorship, both party and personal. His regime is moving backwards economically, asserting political control over industries and companies both big and small. At the same time, he adopted a more aggressive international stance, mixing confrontational “Wolf Warrior” diplomacy with assertive military action, especially directed at Taiwan.

Problematic, certainly. Harmful, definitely. Threatening, depends.

When President Donald Trump was elected, Beijing was seen as a problem, primarily economic, in his opinion. The administration’s focus—misguided, ineffective, and counterproductive—for the first couple of years was trade. There was no public panic, despite the increasing challenge posed by an authoritarian state growing both more aggressive and prosperous.

Just a couple years later, with the president’s reelection campaign in full swing, the bipartisan view in Washington appeared to be that the PRC was America’s enemy number one. Indeed, the U.S. was even trying to conscript friendly states into its burgeoning conflict with Beijing.

Yet too often lost in the discussion were the PRC’s many weaknesses. Beijing acts as if it is the globe’s second superpower. It is not.

China’s recent economic growth has been impressive, but it began on a minimal base. The PRC is still a poor country. Its economy is large, but with four times as many people as the US, China’s per capita income remains low. That limits the money available for economic development, caring for an aging population, staging an arms race, and many other purposes.

China’s population has likely crested, and will begin falling. India will take over as the world’s most populous country. The PRC is at risk of growing old before it grows rich, with a fertility rate that barely budged after abandonment of the coercive “one child” policy. This system resulted in a rapidly aging population that has turned a worker surplus into a dearth, and leading to a socially destructive shortage of women. Beijing has found no solution to counteract decades of counterproductive social engineering.

China’s economy remains heavily politicized, with rising party interference in business decision-making, a disproportionate role for inefficient state enterprises, significant examples of bad debts being concentrated in state banks, overbuilt and overpriced real estate and stock markets, and a host of other institutional weaknesses. The Xi government’s determination to harness private economic gains for regime advantage threatens the country’s economic foundation.

China’s political system enjoys an illusion of stability, but Xi Jinping remains fearful even after acting as the new Mao and reintroducing totalitarian dictatorship. Despite amassing enormous power, Xi sees enemies everywhere, having recently denounced CCP members, believed linked to his predecessor Hu Jintao, who demonstrated “political obfuscation and mental obtuseness” and possessed “ulterior motives to push through [evil] agendas.” Their offense? Promoting democracy within the party. CCP apparatchiks today already fear making decisions and telling Xi the truth, like party members under Mad Mao. This system wrecked party policymaking and created enormous hardship, for instance, delivering mass famine during the Great Leap Forward.

China’s pernicious mix of domestic repression and foreign assertion has pushed countries increasingly into opposition to Beijing. Japan’s ongoing leadership race featured a debate over confronting the PRC. Australia is acquiring nuclear-powered submarines to deter Chinese maritime activities in the region. Criticism of China’s policies has intensified in Europe. While most of these nations oppose a cold war with the PRC, their collective response is limiting the latter’s economic opportunities and military advantages.

China’s friends are transactional at best, and likely faithless in a crisis. North Korea is Beijing’s only military ally, and may be more dangerous as a friend than a foe. Cambodia and Pakistan cooperate with the PRC, but share little other than a fondness for dictatorship in the first instance, and hostility toward India in the second. Belt and Road Initiative money buys the loyalty of poorer states only as long as the money flows. Public attitudes in onetime friendly states, most notably Australia and South Korea, have crashed in response to ham-handed Chinese retaliation for perceived offenses.

China’s continuing crackdown on liberty in all its forms has created a large pool of discontented victims. Formerly independent journalists and human rights lawyers, people of faith ranging from Buddhist and Daoist to Christian and Muslim, party officials purged and labor activists suppressed, more liberal CCP members pushed into the closet, and a younger generation tired of internet censorship and cultural repression. To organize against Xi would risk career, freedom, and perhaps life, but if he faces a crisis, economic or military, he might see political support evaporate and opposition multiply.

China’s leadership is not immortal. If not removed from office, Xi still will eventually die. Despite ruling for many years his legacy could be swept away almost overnight. Mao dominated PRC politics for 27 years and led the party as it fought for power before that. After his death in 1976 his legacy was rapidly dismantled and the only link between China then and now might be his picture on the country’s currency and his portrait hanging on Tiananmen Square’s Gate of Heavenly Peace. Xi’s tyranny could dissipate as quickly—with all the images of his unloved countenance disappearing permanently.

None of these factors diminish what the PRC has achieved in recent decades. It has transformed the international marketplace and upended the post-Cold War order, with more changes in the offing. However, the challenge posed is measured and Americans should respond accordingly. The US should not allow advocates of ever-expanding government to use the specter of China as an excuse to further bloat Uncle Sam’s budget, imitating Beijing’s worst policies in the bargain. America will win the intensifying competition by relying on its historic strengths rather than aping China’s statist strategies.

Doug Bandow

Doug Bandow

Doug Bandow is a senior fellow at the Cato Institute, specializing in foreign policy and civil liberties.

He worked as special assistant to President Ronald Reagan and editor of the political magazine Inquiry.

He writes regularly for leading publications such as Fortune magazine, National Interest, the Wall Street Journal, and the Washington Times.

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