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China’s Economy Could Collapse: What Does That Mean For America?

China is facing a storm of challenges that could bring down its mighty empire in a decade, according to geopolitical expert Peter Zeihan.

A China yuan note is seen in this illustration photo May 31, 2017. REUTERS/Thomas White/Illustration/File Photo
A China yuan note is seen in this illustration photo May 31, 2017. REUTERS/Thomas White/Illustration/File Photo

As cliched as it sounds, “History has a way of repeating itself.” That includes seemingly omnipotent and all-powerful nations that, in the darkest of times, have left alarming impressions of being permanently entrenched threats to the military and/or economic preeminence of the United States of America. 

For many decades, the Soviet Union seemed unstoppable and then seemingly out of nowhere, the “Evil Empire” collapsed in 1991, thanks to weaknesses that few American pundits had foreseen. Then – and in partial overlap with the Soviet menace – you had Japan, which, though a political and military ally of the U.S., was in many ways an economic rival to America, and news stories in the 1980s and early 1990s were replete with Japan-bashing alarmism that made it sound as though that East Asian island nation was going to buy up and buy out the entire American economy. Then in 1992, Japan’s bubble economy collapsed, leading to its “Lost Decade,” and they weren’t such a bogeyman after all.

Now, as too-good-to-be-true as it may seem, there are at least some indicators that we may soon witness a similar phenomenon with the People’s Republic of China (PRC)

The Basics

According to a September 20, 2023 article titled “Is China Heading For a Total Collapse? What Does It Means for These Companies?” From the opening paragraph:

“China is facing a storm of challenges that could bring down its mighty empire in a decade, according to geopolitical expert Peter Zeihan. In a recent interview, Zeihan revealed how China’s huge military, tight control over its citizens, massive debt to the US, dependence on exports, shrinking workforce, and one-child policy are all threatening its stability and growth.”

Chinese Collapse = Good for America and the West? 

The prevailing consensus, from a pro-American standpoint, is that the demise of a brutal dictatorship and economic bad actor like China couldn’t happen soon enough. The most recent writeup that articulates this viewpoint comes to us from Gordon C. Chang – author of “The Coming Collapse of China” and the just-released “China Is Going to War” – in a September 20, 2023 editorial published in Newsweek bluntly titled “The West Must Bring China Down.” The salient points of Gordon’s rationale are:

“The Communist regime believes it has the right to do anything it wants—including spreading disease, stealing intellectual property, proliferating nuclear weapon tech, and breaking apart neighbors … Other than surrendering sovereignty and submitting to Chinese rule, there is nothing the West can do to accommodate Communist China. China’s regime believes it is in a do-or-die struggle with us. Taking the long view, we must win.”

Counterpoint: Chinese Collapse = Bad for America and the West

How could the pending collapse of the PRC be anything but a net positive for America and its allies? To suggest anything otherwise sounds completely counterintuitive, but a modicum of objectivity and willingness to consider more than one side to a story is important. 

A September 19, 2023 op-ed piece in Newsweek by Simone Gao (described in her mini-bio as “a journalist and host of Zooming In with Simone Gao”) titled “The West Will Suffer If China Fails.” To wit:

“It is in the best interest of the West to help China avoid a collapse. The Western world has a vested interest in ensuring the stability of the Chinese economy. As [U.S. Commerce Secretary Gina] Raimondo put it in a News Hour interview, ‘We do about $700 billion of trade with China every year, which underpins hundreds of thousands of jobs in America. So anything that we can do in trade with China that creates jobs in America or helps U.S. businesses to grow and innovate is a good thing.’”

Concluding Counter-Counterpoint

I understand where Simone is coming from. After all, back in my college days, I myself was a firm supporter of U.S.-China trade ties – “constructive engagement” was the catchphrase we used back then – as I was strongly influenced by works such as Richard M. Nixon’s 1994 book “Beyond Peace,” which had optimistically prognosticated that economic liberalization in China would eventually lead to political democratization, as had been the case in former dictatorships such as South Korea, Taiwan, and Chile. However, as we know now with 20/20 hindsight, those rosy scenarios for China never came to fruition.

As for the concerns about economic impact, let’s again take a look at history. Prior to America’s entry into World War II, the U.S. had significant trade ties with the Empire of Japan and Nazi Germany alike; in the latter case, among other things, we as a nation were hosting transatlantic zeppelin flights such as the ill-fated Hindenburg, not to mention sending our athletes to the 1936 Summer Olympics in Berlin (whereupon Jesse Owens immortalized himself by winning four gold medals and exposing the fallacy of Adolf Hitler’s notions of Aryan racial superiority). 

Without a doubt, there were thousands of American jobs tied to trade with those eventual enemy nations, and the loss of those jobs was undoubtedly painful to those American workers, especially against the backdrop of the Great Depression. But that pain was a necessary sacrifice for the sake of bringing about the eventual downfall of those now-defunct despotic nations. Soon enough, America would emerge stronger than ever in terms of economic as well as military might.  

A coin and a banknote of China's yuan are seen in this illustration picture taken February 24, 2022. REUTERS/Florence Lo/Illustration

Likewise, the economic collapse of the Soviet Union and the so-called “peace dividend” from the resultant end of the Cold War also spurred a military drawdown that in turn triggered a ton of job losses among active-duty military members and private sector defense industry employees. Yet who in their right mind would use that pain as an argument for saying we should’ve tried to save the USSR?

I would respectfully posit that this is the same mentality that must be applied against any concerns about negative impacts from the would-be downfall of the current despotic nation of China.

Christian D. Orr is a former U.S. Air Force Security Forces officer, Federal law enforcement officer, and private military contractor (with assignments worked in Iraq, the United Arab Emirates, Kosovo, Japan, Germany, and the Pentagon). Chris holds a B.A. in International Relations from the University of Southern California (USC) and an M.A. in Intelligence Studies (concentration in Terrorism Studies) from American Military University (AMU). He has also been published in The Daily Torch and The Journal of Intelligence and Cyber Security. Last but not least, he is a Companion of the Order of the Naval Order of the United States (NOUS)

Written By

Christian D. Orr is a former Air Force officer, Federal law enforcement officer, and private military contractor (with assignments worked in Iraq, the United Arab Emirates, Kosovo, Japan, Germany, and the Pentagon).

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