# The Elements of the China Challenge/IV. China's Vulnerabilities

​IV. China’s Vulnerabilities
After Mao Zedong’s disastrous Great Leap Forward (1958-1962) and bloody Cultural Revolution (1966-1976), the Chinese Communist Party presided over great increases in China’s industrial and technological capabilities, economic prosperity, and military power. The PRC’s global reach and international influence have expanded accordingly. Notwithstanding its progress in pursuit of national rejuvenation and the transformation of the international order, the PRC’s vulnerabilities have also grown under the CCP’s watch.
Some of China’s vulnerabilities derive from the nature of autocracy.174 For want of freedom, autocracies tend to struggle to maintain economies that over the long term can adapt, innovate, and grow. Because of their imperial ambitions and disdain for international norms and standards, autocracies make poor friends and are prone to estranging allies and partners. And because of the need to repress their own citizens, autocracies typically must divert resources from military affairs abroad to the preservation of order at home.
In addition to the vulnerabilities that inhere in all autocracies, the CCP’s blend of communism and hyper-nationalism along with the country’s particular circumstances expose China to a variety of specific vulnerabilities.
First, China’s economy faces significant difficulties. Although China is a global manufacturing and technological powerhouse, Premier of the State Council Li Keqiang conceded in May 2020, “There are still some 600 million people earning a medium or low income, or even less…. Their monthly income is barely 1,000 yuan (about $142), not even enough to rent a room in a medium-tier Chinese city.”175 The pandemic has compounded the problem by increasing unemployment. Before the COVID-19 crisis, moreover, social unrest in the PRC percolated as the economy experienced its lowest growth rate in 30 years.176 The new reality compels the CCP to adopt more stringent measures to control the population.177
Several forms of dependence could hinder the sustained and substantial economic growth that supports the CCP’s popular legitimacy. The CCP plans to overcome its reliance on exports by bringing the 600 million or so Chinese who live on modest wages into the middle class. Nevertheless, in the short term Beijing must export manufactured goods to consumers in the ​United States and other advanced industrial nations to keep factories running and people working even as, particularly in the wake of the global pandemic, the United States and others seek to reduce reliance on Chinese manufacturing.178 Notwithstanding the CCP’s lagging efforts to establish the yuan as a global reserve currency, China depends on the American dollar to settle many international transactions. And China’s advanced manufacturing uses sophisticated microchips and other high-value technological goods from the United States and other advanced industrial nations.179 This leaves critical sectors of China’s economy vulnerable to temporary disruption by foreign governments’ imposition of export controls.180
Furthermore, while the extent in China of the economic contraction caused by COVID-19 is uncertain, the pandemic’s consequences are bound to exceed what Beijing endured in the aftermath of the 2008 financial crisis. Stimulus measures stretching across more than a decade have taken their toll on China’s corporate sector while saddling the government with immense debt.181 In response, China has imposed strict lending standards on its banks, the efficacy of which is to be determined.182 While many Chinese companies depend on capital markets in the United States, Britain, and other countries, some use secondary listings in Hong Kong or Shanghai to insulate themselves from limitations on access to foreign capital markets.183 Meanwhile, China’s manufacturing sector is likely to keep contracting due to sharp drops in consumer demand at home and abroad. Declining manufacturing, diminished consumption, and limited stimulus tools would depress GDP and increase unemployment,184 yielding further dissatisfaction and social unrest.185
A booming Chinese economy creates its own vulnerabilities. While the last several decades show that greater economic freedom does not guarantee political liberalization, China’s powerful economic engine, combining choice with state command and control, may still encourage a frame of mind within the middle and upper-middle class that is at odds with authoritarian government. The opportunity to choose that a growing economy fosters and the prosperity it unleashes tend to produce a taste for more freedom. Making decisions about work and property can increase citizens’ expectations for choice in other realms while producing greater affluence. Choice and affluence, moreover, tend to heighten the demand for the protection of the fruits of one’s labor through property rights and laws that are settled, public, and fairly applied. Alternatively, as some have argued, middle- and upper-middle-class urbanites may continue to support the CCP because of the comfort and wealth they have achieved under the party’s dominion even while dissatisfaction mounts among the hundreds of millions of rural citizens ​whom economic development has left behind.186 Either way, continued economic growth as much as economic stagnation could spur a destabilizing demand in China for government accountability and for greater protection for basic rights and fundamental freedoms.
Second, China suffers from worsening demographic conditions. The size of the population is on track to peak in the coming decade and then gradually decline. To make matters worse, Beijing is about to experience an explosion of those 65 and above while its working-age population shrinks sharply. The absence in China of a modern social-safety net will impose strains as workers struggle to support a steadily growing retiree population. In addition, as a consequence of China’s one-child policy — abolished in 2016 but with consequences that will reverberate for generations — China’s working-age population will suffer from a prolonged gender imbalance (the 2010 census reported 120 males for every 100 females).187
Third, China’s accelerated economic development has severely degraded the environment. The PRC has been for more than a decade and remains the world’s largest source of carbon emissions. Pollution produces dystopian conditions in many of China’s major cities while reducing the country’s arable land and clean water. As a consequence, life expectancy in China has been falling.188 A recent Lancet study found that every year 1.1 million people in China die prematurely due to air pollution.189
Fourth, corruption — at the local level as well as in the party’s upper echelons — creates risks for the CCP. Many members of the elite have enriched themselves at the expense of the people. Along with uneven economic growth and demographic and environmental problems, repression and land expropriation exacerbate discontent, provoking more than 130,000 protests of varying types annually. Such protests are likely to shake the system for years to come.190
Fifth, the CCP devotes considerable resources to the repression of ethnic and religious minorities. In gross violation of the principles set forth in the 1948 Universal Declaration of Human Rights, the CCP maintains a military occupation of Tibet that dates to the 1950s, conducts a brutal program in Xinjiang to “re-educate” Uyghurs and millions of other Turkic Muslims, oppresses ethnic Mongolians in China’s Inner Mongolian Autonomous Region, and imposes onerous regulations on China’s Christians, who number around 70 million.191
​Sixth, Beijing allocates extraordinary sums to internal security. The PRC refers to these expenses, which include central-government and regional-level costs, as “national domestic security spending.” One open-source analysis suggests that China directs approximately 18% more to internal security than to external defense.192 PRC spending on national domestic security grew from 348.6 billion RMB ($57.2 billion) in 2007 to 1.24 trillion RMB in 2017 ($197 billion in nominal dollars). These estimates “exclude billions of dollars spent on security-related urban-management and surveillance initiatives” even as China’s lower wages and costs “render Chinese security capabilities much higher per dollar spent” than U.S. security spending.193
Seventh, China’s military lacks popular legitimacy. The PLA’s purpose is to fight for the CCP, not the people. Consistent with Mao’s motto, “political power grows out of the barrel of a gun,” the party presides over military decision-making. Nevertheless, as the PLA has modernized, ideological conviction within the ranks has declined while corruption has increased. Xi has sought to restore party allegiance — more specifically, allegiance to him — by reinstituting mandatory ideological training and purging the military’s most senior generals.194 The “re-redding” that the PLA must frequently undergo highlights the tension between the party’s need for a professional military and its demand for unquestioned loyalty.195
Eighth, the CCP faces questions about leadership succession. Uncertainty surrounds the person who will follow Xi Jinping as China’s paramount leader. The party’s practices under Xi have diverged from the CCP’s norms for leadership succession established after Deng Xiaoping. Whereas in the past, the party would have given some indication at this point in the paramount leader’s tenure as to his successor, that question remains under Xi shrouded in mystery.196
Ninth, China’s conduct of foreign affairs generates distrust abroad. According to an October 2020 Pew Research Center survey, “Views of China have grown more negative in recent years across many advanced economies, and unfavorable opinion has soared over the past year.”197 Before the global pandemic, Beijing faced a backlash from foreign capitals springing from its authoritarian schemes of economic co-optation and coercion, intellectual-property theft, rejection of reciprocal treatment, lack of transparency, and egregious human rights abuses. The global pandemic has amplified international discontent with the PRC. The new coronavirus that emerged in Wuhan in late 2019 quickly spread to peoples and nations around the globe, ​in part because China concealed the outbreak from the world. Beijing further damaged its reputation through its international campaign of disinformation, and its “wolf warrior” diplomacy to deflect responsibility for the pandemic. The CCP’s shameful misconduct — major factors in producing a known worldwide death toll that has surpassed one million with ruinous consequences for societies and economies around the world — has given rise to international demands for accountability over the spread of COVID-19.198
Conclusion
The CCP confronts a classic dilemma of authoritarian government: the more the party employs repressive means to perpetuate its monopoly on state power, the more it risks driving a wedge between itself and the people. At the same time, and even as hundreds of millions in China remain mired in poverty, hundreds of millions have attained middle-class affluence under the CCP. To what extent the delivery of economic growth, the manipulation of nationalist sentiments, and the generation of fear and submission by a totalitarian surveillance state will enable the CCP to retain its hold on power remains to be seen.
It also remains to be seen to what extent the CCP can address effectively the variety of specific vulnerabilities China confronts. The party’s discipline and ruthlessness have enabled it to marshal vast resources and patiently pursue the production of wealth at home and the acquisition of power and influence abroad. At the same time, the CCP’s authoritarianism, which eradicates dissent, constrains the party’s ability to recognize the regime’s weaknesses, correct errors, and adjust to changing circumstances.199
Along with knowledge of China’s conduct and its intellectual sources, understanding of the CCP’s vulnerabilities — not least the limitations of its ability to address its vulnerabilities — must inform U.S. efforts to meet the China challenge.