Does China change the game?

Abstract

It is vastly overdone to suggest that China changes the game. The challenges posed by the Chinese economy will not disappear because the U.S. puts pressure on them. The swing to statism in China’s internal and external polices, however, is raising backlash abroad and driving down its growth rate at home. In the national security context, there is no one hyper-cool technology that is going to suddenly enable the Chinese to establish dominance. Technological prowess, including military capacity, is about system integration. Protectionism, instead will weaken the U.S. through cronyism, decreasing competition by statism. The sign of the self-inflicted damage from the Trump administration’s policies is the marked decline in net inwards foreign-direct investment. Though troubling, it is not by itself sufficient to generate a recession.