National Security / Politics

Communist China Stumbles

China

Is Communist China overextended? China’s “command and control” economy – much like the former Soviet Union’s – suffers structural flaws. They stem from centralized decision-making, in contrast to capitalism, which leaves most decisions to citizens. Contrary to rosy pictures and leftist efforts to centralize the US, Communist China is stumbling. Simple, but true.

Nobel-prize winning economist Milton Friedman wrote: “A major source of objection to a free economy is precisely that it gives people what they want instead of what a particular group thinks they ought to want,” and “underlying most arguments against the free market is a lack of belief … in freedom itself.” That would be China.

Adam Smith, the 18th-century economist who wrote “Wealth of Nations,” gave us the best metaphor for capitalism. An “invisible hand” – or unseen forces – guide free people in a free economy to their best social benefit. The contrast is communism’s iron fist.

History proves millions of freely made decisions by millions of free people deliver a stunning outcome – supply and demand balance, prices and trade flow, minimal intervention required.

While regulation of trade, averting monopolies, modest expenditures for the common good, laws for ordered liberty, security, and correcting irregularities modulate trade, people – not governments – are best left consuming, producing, investing, saving, and correcting.

That is the difference between a free economy and command-and-control communism; the former leaves most decisions to individuals, latter aggregates power and dictates decisions.

All this may seem like theory, but theory – in practice – has consequences. While China can centrally dictate economic changes, they can also shut down whole cities, demand anything of anyone, surveil, imprison, prosecute, reeducate, limit births, force abortions, harvest organs, suppress speech, religion, and all human rights – and do.

By contrast, a free nation understands liberty resides with the People, not as a collective but as individuals, each with sacred rights and duties protected by limited government. In other words, minimizing government intrusion maximizes social good, even if a “safety net” is important.

This brings us to China – now. Few are saying so, but trouble is afoot in that dragon’s lair. Their economy has grown for decades, chiefly because Western nations imagined more economic freedom – trade preferences, chances to catch-up – would produce political freedom.

The sad truth is – it did not. Instead, China took the West’s money – trade preferences, indulgences, interdependence – with impunity and ran.

While suppressing individual liberties, they modernized their military, extorted smaller countries, developed space weapons, artificial islands, a larger navy, more ballistic missiles, stole intellectual property, pushed cyber espionage, and now – want “global dominance.”

All this is disturbing, why President Trump said: “enough” began seeking accountability – even before the Wuhan virus spread globally. He focused on rebalancing trade, even terms, fairness.

Interestingly, just as Ronald Reagan began “truth-speaking” about the Soviet Union – and those truths echoed – Trump’s truths echo.

But today – if you look closely – Communist China’s command-and-control economy is stumbling.

First, since 2008, they have assumed mass debt – from 150 percent of GDP to 290 percent. While the US is leveraged, China lacks the flexibility of open markets, which naturally assess, price, buy, sell, inflate, deflate, modulate, redirect capital, and resolve. See, e.g., These charts show the dramatic increase in China’s debt.

Second, everything China produces, everything they export, and meeting the needs of their large, suppressed population – depends on energy. China is failing at energy. While long-term trends are elusive, command-and-control economies fail because they cannot manage all decisions from the center. In China’s case, they cannot replace billions of decisions by 1.4 billion of people, accurately matching supply and demand, or even vaguely match preferences to production.

Thus, we are seeing a Chinese economy skid, miss gears, grind through a mismatch of supply and demand, not least in energy. Media – left and right – are beginning to see skid marks. Even CNN reports “China’s manufacturing industries are in trouble,” as The Guardian reports: “China’s factory activity has shrunk unexpectedly amid curbs on electricity use and rising prices for commodities and parts, raising more concerns about the state of the world’s second-biggest economy.” See, It’s official. China’s manufacturing industry is in trouble; China’s factory activity in shock slowdown as energy crisis hits home.

Often prescient, The Economist reports “the latest shock to China’s economy” is “power shortages,” as “at least 19 provinces have suffered power cuts in recent weeks.” See, The latest shock to China’s economy: power shortages.

The Business Insider reports Chinese restrictions on property and energy, debt and defaults, mismanaged coal and natural gas production, imperil growth. See Evergrande and energy shortages are shaking China’s economy. Here are the most exposed countries.. Even the latest Foreign Affairs predicts “the end of China’s rise.” See The End of China’s Rise.

What are the implications? Will China’s high debt and energy weakness have political effects? Could disaffection grow into organized objections, as happened in the former Soviet Union? Does the failure of a command-and-control economy mean political reform?

Given communism’s iron hand, not likely in the near term. But three implications do-follow. First, those dependent on China are vulnerable, so supply chains across Asia, Russia, and Europe will shudder. Second, China may have to rethink their beeline for “global dominance.”

Finally, America should take a lesson: Socialism, mass debt, runaway spending, and centralized power are wrongheaded, dangerous to individual liberties, and impair social wellbeing. Simple, but true.

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Thomas Koller
1 month ago

President Richard Nixon opened the door and broke the ice in China. Why not? China had a massive population eager and willing to work. $$$$$, and not sugar plums, danced in the minds of American Capatalists eager to profit in what the Press thought would be the very medicine the CCP needed as a prerequisite in joining the world’s First

gerald serlin
1 month ago

Excellent article. I do not know if I agree with it because it represents my life view, or if it is because of the conclusions it reaches. Either way, I agree fully.

RICHARD D SANDERS
1 month ago

In the present SOCIAL-ECONOMIC FRAMEWORK, CHINA will be forced to play their hand and exercise some form of military action against our U.S.A. If they can cripple us by whatever means, the rest of the world will fall in line. Right now our Pentagon “leadership” are “anesthetized” to planning a preventative military action. Austin and Milley should be stripped of their power and shuttled aside to confinement . IT IS A FACT THAT ANY MILITARY PERSONNEL IS SUBJECT TO COURT MARTIAL. Charges need to be brought yesterday. NOW IS NOT TOO LATE! ! !.

RICHARD D SANDERS
1 month ago

Even AMERICANS who are just slightly POLITICALLY SAVY should see the connection between our aspiring left leaning would be oligarchs and the creeping Chinese commercial involvement that has been seeping gradually into our economy as a result of “feather brained liberals”, mercenary leftists and “BLACKMAILED GOVERNMENT OFFICIALS” So if many Chinese citizens are rejecting the heavy handedness by Bejing , as was evident in Hong Kong we should think back to the recent Cuban upheaval here; recognize Biden’s very un American like response to their plight; in fact we should draw a parallel here to the plight of Hong Kong, and Bejing’s actions toward Taiwan. Can we recognize that “Black mailed Biden” and Xi Jinping have populations who want the rights that Nature’s GOD has given to us all: And that now is the time to identify and crush evil people who have despotic aspirations and not one iota of their falsely proclaimed benefits under the always failed socialism. Americans, it’s time for us to RECALL the mute, complicit and purposely power hungry and evil everywhere from the township board to the Congress.

Becky
1 month ago

Start using the correct term, media! What we are seeing globally is Communism, not socialism.
Hopefully China will fall. It should have decades ago, except corrupt governments like the US’ kept it propped up.
As the Global elite wanted China and it’s Communism at the front in world leadership, this will be a fascinating lesson in Greed.

Charles Nolan
1 month ago

When things fall apart, communists (Stalin) and socialists (Hitler) tend to start really bad wars. With Cut & Run Biden, China will most likely soon use nuclear weapons to win a quick war in Asia, while Biden will send Kerry to negotiate our surrender. Communist and socialist governments are generally run by dictators, which Biden sees as very much like himself.

Kevin
1 month ago

Socialism, Fascism and Communism Does Not Work!The democratic party Does Not Know That, Because they Make Up their Own History. According to the know it all left-haters, if we give away all Our Freedom and give all power to biden and his cronies, We will be in the great utopian Godless World. they say and think Religion has killed more people than what they aspire for. I know it’s hard but get a Real History Book. More have been Murdered by communists, fascist and what they long for in this God Blessed U.S.A. socialism. We don’t Need God, We Have joe biden? Good Lord Have Mercy On The U.S.A…Lord Intervene and Save Us from Ourselves. In Jesus Name We Pray.

Robin Walter Boyd
1 month ago

Communism is a result of extreme Socialism. We, in the U.S., can see how Socialism has adversely affected free capitalism as we have lost free capitalism over the past century. The more government intervention and involvement there is in business, the more corrupt and expensive doing business becomes. The Socialist chant is always; “We are doing it to protect citizens.”, but that is almost always a deceit designed to have Socialist minded politicians funnel tax dollars into Socialist organizations.
Taking notice of Communist China’s issues with not having a free capitalist business model just magnifies how bad business in the U.S. has become as we have lost free capitalism to Socialist regulations.

Bruce
1 month ago

As Dennis Prager has said, “before you decide anything, ask what is the cost. (Consequences).

Diane Rall
1 month ago

Dr

Luke
1 month ago

The next war will likely begin in the South China Sea over oil. It will then escalate to a land war in the middle east. . .over oil. Coal is going to take CCP only so far. After that, it’ll be a war to steal oil. America will be in no position to object or defend at that point.

Rush Glick
1 month ago

We can’t just sit around and wait for China to collapse. We are heading fast toward our own collapse at the hands of America-hating leftists. We need to get serious about our own loss of liberties here on our own soil.

RICHARD D SANDERS
1 month ago
Reply to  Rush Glick

RECALL and REPLACE; recall petitions for recall elections and CONSTITUTIONALLY MINDED CANDIDATES to VOTE IN where the Leftist rubbish has been removed

Joe Dixon
1 month ago

The article is spot on; THE CCP’s failure cannot happen fast enough for me!

johnh
1 month ago

Thanks for lots of interesting & thought provoking info.

Mark
1 month ago

Democrats don’t care about any of this. They want iron fisted rule in the US although they don’t understand the consequences.

Douglas Ross
1 month ago

Well said!

Rik
1 month ago

It’s time for We the People to “Prevent Domestic Communism” that Comrade President Jackass Joe Biden, Liar in Chief, is Forcing Upon the American Citizenry!
The Progressively Communist Democrats AREN’T even HIDING Their AGENDA!

Donald L Schmidt
1 month ago

We shall see if communism or the wests’ preoccupation with profits win out.

Glee
1 month ago

We’ve already seen that, Mr. Schmidt. Did you sleep through history class and the last 50 years of nightly news?

George Mason
1 month ago

Makes no difference as we living in the united States lose in either case. It is because of American corporate greed that China has been able to overtake US manufacturing. Trump, in pointing out the real problem, angered Corporate leadership which helped Biden win the last election. It is time that we placed America first instead of our real enemies. Our real enemies are at home and abroad.

Luke
1 month ago
Reply to  George Mason

Biden and Harris ‘won’ nothing. Americans might not be the brightest people on the planet but they’re not completely stupid. Boomers especially know what dementia looks like. And, anyone else who didn’t see it is genuinely blind and apoplectic. Biden won nothing: Pelosi had both hands on the scale.

Constant de Calonne
1 month ago

PS American politicians who advocate reckless spending will cause .huge AMERICAN ECONOMIC PROBLEMS EVEN WORSE THAN CHINAS REPORTED PROBLEMS AND IT WILL CAUSE GLOBAL IMPACT AND EFFECT ! THESE GOVERNMENT OFFICIALS ARE NOT ACTING IN GOOD FAITH PERSONALLY I VIEW IT AS TREASON TO THE COUNTRY AND TO ANERICANS!

Constant de Calonne
1 month ago

Correction TREASON TO AMERICANS REPEAT .I REFUSE TO BE THREATENED OR USED AS A HOSTAGE BY DEM PARTY IN THEIR QUEST TO CONTROL AND RUIN THE USA

ShellzNcheez
1 month ago

If the CCP dictates the flooding of America’s economy with less expensive Chinese goods, it stands to reason they will be in debt-at least until they crush competition here in the US. Amazon is contributing to their success, of course and on many levels. No doubt Chinese sellers are provided with deep discounts on the back end. Nonetheless, profits can’t be made if the cost of production (including logistics) exceeds consumer purchase price.So my question is this: Is the rising debt a result of hopelessly myopic mismanagement or the natural consequence of ruthless market manipulation and therefore temporary.

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