Communist China’s vulnerabilities bubble to the surface

America’s chief geopolitical and ideological competitor suffers from inherent weaknesses


Brian Katulis
Nov 27, 2022


Protests against “COVID-zero” policies spread across China

Thousands of protestors took to the streets of Shanghai, China’s financial hub and largest city last weekend, chanting for China’s Communist leaders to step down. The immediate spark was growing public discontent with strict lockdowns as part of the communist government’s “zero-Covid” approach. These protests have reportedly spread to other cities, including the country’s capital, Beijing, where students chanted, “Freedom will prevail.”

China has witnessed previous protests over the government’s handling of the pandemic, and government authorities are now cracking down on these protests as they have in the past. Only time will tell if this round of demonstrations unfolds any differently, but the regular outbreak of protests inside of China in recent years shows an inherent vulnerability in a communist system that lacks basic freedoms.

Communist China’s three main vulnerabilities

1. China’s political system fails to respect basic freedoms. There’s nothing new here: Communist rulers in China have run roughshod over the basic rights and freedoms of its own people for decades. But as Freedom House noted in its most recent Freedom in the World report, “China’s authoritarian regime has become increasingly repressive in recent years.”

These stepped-up efforts to crack down on dissent reveal the sense of insecurity that China’s communist leaders feel from their own people. A ruling system that targets a 90-year-old Roman Catholic cardinal and puts its own people in forced labor camps is not one that is confident in its own legitimacy.

2. China’s rigid economic system stifles innovation and potential for growth. The “zero-Covid” approach is just the tip of the iceberg when it comes to China’s current economic model. The country faces major debt challenges in its real estate market, and the government recently stepped in with measures in an attempt to address the strains in that market.

But beyond this immediate crisis in the real estate market, China has larger, structural challenges with its economic model, including an aging population and growing restrictions on private enterprise. America’s private sector has continued to shift away from China, leading to an erosion of financial and economic ties between the world’s top two economies. Beijing’s growing international isolation caused by its own unforced errors has motivated some of the talent it needs to look elsewhere for opportunities.

3. China’s global engagement strategy has failed to win friends and overtake competitors. China hoped that its vaccine diplomacy in the wake of COVID-19 and its economic engagement with poorer countries would generate goodwill, but these efforts have largely backfired and failed to produce results.

The shortcomings in vaccines produced by China led countries to look elsewhere during the pandemic. China’s “Belt and Road Initiative” of trying to build a global economic network through infrastructure lending and investment has resulted in charges of predatory lending and debt-trap diplomacy against China. Communist China even tried to bully small countries like Lithuania when it spoke up for freedom.

The Chinese communist leaders’ decision to side with Russia in its war against Ukraine was also deeply unpopular in Europe, a key arena of competition for global influence.

As a result, global public opinion has shifted against China, as Peter Juul noted.

What America Should Do About China

The midterm elections earlier this month will usher in a new political landscape in America, but one that remains split along partisan lines. Depending on how leaders choose to work together in the next two years, a bigger lane for a moderate, balanced U.S. foreign policy approach may open up, and China is one of the issues where there is a fairly strong bipartisan consensus, especially when it comes to economic competition.

China’s vulnerabilities provide an opening for the United States to gain additional strategic advantage on several fronts.

First, the United States should continue to invest in America’s ability to compete in the world. One of the major success stories in America over the past few years have been measures the country has taken to develop a 21st century national industrial policy through a series of investments that are helping give an edge to America’s workers and companies. Fairly rapidly, the U.S. Commerce Department led by Secretary Gina Raimondo has become an important force in helping make investments in strategic industries such as microchips.

The United States should continue down this path but remain mindful that the strength of America’s economic system is something China’s communist system lacks – America has a vibrant private sector that deploys capital and resources more efficiently than China’s top-down model. Indeed, the differences between the American and Chinese political and economic systems are stark as ever as the implications of Beijing’s draconian zero-COVID have become clear.

Second, America should do more to define a new global economic engagement strategy that competes with China. As the world’s largest and most vibrant economy, America has no shortage of economic partners around the world, including in Asia. Nor does the current U.S. administration lack a set of policy frameworks for its global economic engagement, ranging from “Build Back Better World” (remember that?) to the Indo-Pacific Economic Framework announced earlier this spring.

What America currently lacks is a sharply focused global economic strategy that pulls the most compelling elements of the policy ideas together with the strengths of America’s political economy. This means developing a clearer game plan on building economic ties between the United States and its partners in Asia, countries that are looking for something better than what China has to offer these days.

Finally, the United States should continue to defend freedom in the world, especially against threats posed by China. The Biden administration performed strongly this past summer and fall when China threw a temper tantrum and threatened Taiwan, and the U.S. military sent a clear message to America’s partners in the region that it will remain engaged in efforts to defend themselves against threats. The Biden administration has also called out China’s human rights abuses including genocide, and it should continue to do so as it prepares for more direct diplomatic engagements with Beijing’s leaders.

The recent trends inside of China and the United States point to two countries headed on two different pathways. China may become inward-looking and more isolated globally, and this could result in a Chinese communist leadership that is less predictable and more confrontational with the rest of the world. The United States has an opportunity to take additional steps towards a more inclusive nationalism at home that invests in its ability to compete in the world while it builds ties with like-minded partners around the world.

The struggle for freedom in the world continues, and China remains a key front.

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