Replies

If you look at GDP at Purchasing Power Parity, China's economy is closer to the size of the US economy if not slightly larger. By the same measure, the US doesn't really spend 6 times as much on Defense. Those are just nominal terms. Everything is cheaper in China and that includes soldier's pay and military equipment. So the US is not really as dominant as VDH is saying here. That being said, his point about the demographics is true. China is aging very rapidly and that will spell the end of rapid economic growth for them. There will be fewer workers and more old people who will have to be taken care of. It is also true that Trump has been taking out their proxies and it is furthermore true that their air defense systems failed miserably in both Venezuela and Iran when they came up against US air power. It is also true that America is the world's largest agricultural and energy exporter and America still has the most advanced technology of any country in the world. Furthermore, yes, China really does have a ring of smaller powers around it which view it as a threat and which are therefore happy to align with America to contain it.

“That being said, his point about the demographics is true. China is aging very rapidly and that will spell the end of rapid economic growth for them. There will be fewer workers and more old people who will have to be taken care of.”

If I was old and living in china , I would worry about HOW the old people would be taken care of.

When GDP includes government spending, it’s hard to use it as a reliable benchmark.

FLT-bird: "If you look at GDP at Purchasing Power Parity, China's economy is closer to the size of the US economy if not slightly larger.
By the same measure, the US doesn't really spend 6 times as much on Defense.
Those are just nominal terms.
Everything is cheaper in China and that includes soldier's pay and military equipment.
So the US is not really as dominant as VDH is saying here. "

Your post is exactly right, on both sides of the ledger -- China is both stronger in some ways and weaker in other ways than usually acknowledged:

China is stronger because:
- China's Nominal GDP numbers understate Purchasing Power Parity (PPP) by over 50%.
- US GDP (~$32T) is 55% greater than China's nominal GDP ($21T), but 27% less than China's GDP at PPP ($44T).
- In manufacturing, China produces 28% of global value added, the US only 17%.
  2002 was the last time the US produced over 28% of global manufacturing value added.
- China' military spending is officially reported as circa $280 billion however, when converted to PPP and increased by estimates of hidden military related spending, the more realistic number is nearly $800 billion.
  Added together with Russian military (also at PPP w/hidden) of c. $500 billion, combined they roughly match US defense spending.
China is weaker because:
- Unlike the US, China is not self-sufficient in either energy or agriculture.
  They are vulnerable to disruptions in international supply chains.
- China's massive manufacturing economy is built to export, and so will struggle to avoid collapsing if/when the global world order does not support its exports.
- China's military looks impressive on paper but is untested in actual combat.
- The US and Indo-Pacific allies/partners/friends combined massively outnumber CCP China in every category.
- The CCP government is determined to prevent a repeat of the Old Soviet Union's collapse in 1991, and so far is successful.
  How long will that last?
- Nobody today knows how the global demographic crisis will play out long term, and worst-case scenarios look bleak.
  On the other hand, it may be something cyclical which will reverse itself under the right conditions.
  Today, China looks weak demographically, but with 1.4 billion people (or whatever the real number is), they could decline by a large percentage and still be very overpopulated.

Bottom line: I would neither overestimate nor underestimate China, but seek a realistic evaluation that can allow China's manifest weaknesses to be used in curbing its worst behaviors.