53year. In coming years, a shrinking workforce will weigh on
growth, and that smgrowth, and that smaller numaller number of workers will have to ber of workers will have to
support a fast- support a fast- growing population of elderly people. The growing population of elderly people. The
state’s shift fromstate’s shift from a “one-child policy” to a “two-child pol- a “one-child policy” to a “two-child pol-
icy” and now a “three-child policy” hasn’t helped. Xi has icy” and now a “three-child policy” hasn’t helped. Xi has
prompromised that China will achieve a “comised that China will achieve a “commmon prosperity” on prosperity”
that reduces incomthat reduces income inequality by redistributing wealth e inequality by redistributing wealth
across regions, incomacross regions, income groups and econome groups and economic sectors. But ic sectors. But
for now, the country looks to be getting old before it can for now, the country looks to be getting old before it can
grow broadly rich. grow broadly rich.
China also has a debt problemChina also has a debt problem. In particular, it has relied. In particular, it has relied
heavily for economheavily for economic growth on easy credit for property and ic growth on easy credit for property and
other speculative investmother speculative investments. Too often the institutional ents. Too often the institutional
borrowers who have accepted mborrowers who have accepted much of this much of this money expect oney expect
governmgovernment help and protection if they struggle to repay. ent help and protection if they struggle to repay.
Xi knows China’s domXi knows China’s domestic tranquility, and its national estic tranquility, and its national
security, depend on fi nancial stability. To avoid a bank-security, depend on fi nancial stability. To avoid a bank-
ing crisis and an economing crisis and an economic crash, China’s governmic crash, China’s government has ent has
tried to clean up the business of borrowing and lending. But tried to clean up the business of borrowing and lending. But
the various fi ghts in recent mthe various fi ghts in recent months over the fate of possi-onths over the fate of possi-
bly “too-big-too-fail” combly “too-big-too-fail” companies, like the deeply indebted panies, like the deeply indebted
property developer Evergrande, mproperty developer Evergrande, make reformake reform m much easier uch easier
to promto promise than to deliver. ise than to deliver.
For the 2022 WFor the 2022 Winter Gaminter Games, China’s leaders have a mes, China’s leaders have a more ore
imimmmediate problemediate problem. Throughout the pandem. Throughout the pandemic, the state ic, the state
has sharply limhas sharply limited the numited the number of COVID-19 infections ber of COVID-19 infections
within the country’s borders with a “zero- within the country’s borders with a “zero- COVID policy.” COVID policy.”
It has used digital devices to track and trace infections, and It has used digital devices to track and trace infections, and
its tight, highly centralized political control to enforce lock-its tight, highly centralized political control to enforce lock-
downs of a large numdowns of a large number of people. In 2020, this policy was ber of people. In 2020, this policy was
amamong the world’s mong the world’s most effective, and helped China to be ost effective, and helped China to be
the only mthe only major economajor economy to experience growth that year.y to experience growth that year.
Not so mNot so much now. It’s much now. It’s much harder to build a fence uch harder to build a fence
around the Omaround the Omicron variant, which is far micron variant, which is far more infectious ore infectious
if less dangerous for those who’ve been fully vaccinated. if less dangerous for those who’ve been fully vaccinated.
China has yet to roll out its own versions of the mChina has yet to roll out its own versions of the mRNA vac-RNA vac-
cines that have proven so eff ective. cines that have proven so eff ective.
As China prepares for its new mAs China prepares for its new momoment in the Olyment in the Olympic pic
spotlight, it faces the mspotlight, it faces the most highly transmost highly transmissible formissible form of of
COVID-19 yet. ComCOVID-19 yet. Compared with Ampared with America and Europe, it has erica and Europe, it has
a ma much smuch smaller percentage of people protected by previous aller percentage of people protected by previous
infections or access to the minfections or access to the most eff ective vaccines. That’s ost eff ective vaccines. That’s
why foreigners can’t attend the Gamwhy foreigners can’t attend the Games as spectators, and es as spectators, and
why domwhy domestic audiences will enter by invitation only. Mestic audiences will enter by invitation only. More ore
than 20 mthan 20 million people across China are currently locked illion people across China are currently locked
down. All of this comdown. All of this comes at a times at a time of econome of economic slowdown. ic slowdown.
Fourteen years after China’s debut as OlymFourteen years after China’s debut as Olympic host, the pic host, the
spotlight is getting mspotlight is getting much hotter.uch hotter.Bremmer, a TIMBremmer, a TIME columnist, is the president E columnist, is the president
of the Eurasia Groupof the Eurasia Groupcation with the mcation with the mainland, and to build mainland, and to build military ilitary
strength in the South China Sea. strength in the South China Sea.
YET THE REALITY YET THE REALITY is that China’s rise was losing is that China’s rise was losing
trajectory even before a mtrajectory even before a more aggressive U.S. for-ore aggressive U.S. for-
eign and trade policy and the COVID-19 global eign and trade policy and the COVID-19 global
pandempandemic. Wic. While Xi’s “China Dream” of prosper-hile Xi’s “China Dream” of prosper-
ity has becomity has become reality for hundreds of me reality for hundreds of millions illions
of people, extending these gains to a population of people, extending these gains to a population
with rising expectations for a bright future won’t with rising expectations for a bright future won’t
be easy. China is still a mbe easy. China is still a middle- iddle- incomincome country. e country.
To reach WTo reach Western levels of prosperity, it needs estern levels of prosperity, it needs
6% to 7% growth for another generation. That 6% to 7% growth for another generation. That
goal now looks nearly imgoal now looks nearly impossible to achieve, possible to achieve,
because the growth engines that have powered because the growth engines that have powered
China forward in recent decades are running China forward in recent decades are running
out of steamout of steam..
First, a reshoring of mFirst, a reshoring of manufacturing away fromanufacturing away from
China and advances in robotics have cut into Chi-China and advances in robotics have cut into Chi-
na’s lower-wage advantage. na’s lower-wage advantage. Second, its demSecond, its demo-o-
graphics are discouraging. China announced that graphics are discouraging. China announced that
birth rates have fallen for the fi fth consecutive birth rates have fallen for the fi fth consecutive
The growth engines that have
powered China forward in recent
decades are running out of steam
P R E S I D E N T X I J I N P I N G I N S P E C T S
T H E N AT I O N A L S P E E D S K AT I N G T H E N AT I O N A L S P E E D S K AT I N G
OVA L I N B E I J I N G O N J A N. 4OVA L I N B E I J I N G O N J A N. 4