Project Syndicate: China Is Losing the New Cold War

The Communist Party of China seeks to avoid the fate of the Soviet Union and its political system, and that is why China adopted some features of capitalism with a focus on economic growth. Nominal per capital income increased from $333 in 1991 to $7,329 in 2017. But China, much like the Soviet Union, is being drawn into a costly arms race with the United States. China’s defense budget, standing officially at $175 billion, may run more than $225 billion. An aging population, high debt an escalating trade war, as well as over-reliance on inefficient state-owned enterprises could hamper China’s security ambitions. Likewise, China may be undertaking too many costly overseas commitments, including aid and subsidized loans as well as the Belt and Road Initiative. Such investments, warns Minxin Pei, writing for Project Syndicate, could “drain the Chinese government’s coffers at a time when trade protectionism threatens their replenishment.” – YaleGlobal