China's Looming Power Peak: A Global Concern

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Video originally published on February 12, 2025.

The prospect of a conflict with China has loomed over Western security circles for decades. However, the narrative has shifted from China's unstoppable rise to concerns about its faltering growth and increasing aggression. As China faces a multitude of domestic and international challenges, the world is hurtling towards a dangerous situation known as the Peaking Power Trap.

Key Takeaways

China's economy is slowing down, with a declining population, ageing workforce, and a collapsing property market.
China's increasing aggression and military buildup have significant security implications for the US and its allies.
The Peaking Power Trap theory suggests that a weakening China may become more aggressive and prone to conflict.
China's Belt and Road Initiative is a key aspect of its soft power projection, with over 150 nations signing agreements under the framework.
The US and its allies must close China's window of opportunity in every instance of aggression to deter conflict.
China's military modernization and expansion have significant implications for regional security, particularly in the South China Sea and Taiwan.

China's Shifting Global Trajectory

For decades, analysts predicted China's inevitable surpassing of the United States. However, China's current trajectory is one of decline, marked by a slowing economy, demographic crisis, youth unemployment, and a collapsing property market. This shift has significant implications for global politics and economies. China's aggressive international approach, including its intentions to annex Taiwan and assertiveness in the South China Sea, underscores the threat of the Peaking Power Trap. You see, while China was closing the gap on the United States militarily and economically, it had a strong incentive to refrain from decisive acts of aggression as its chances of success were improving with time. Not too long ago, you could barely move for analysts saying it would soon surpass the United States. (Title): The Dragon Bares Its Teeth – China’s Aggressive International Approach A weakening China is a dangerous China. However, the United States’ deterrence policy has thus far kept a lid on things. During the 19th National Congress of the Chinese Communist Party in 2017, Xi set out his goal for China to develop a (quote): “world-class military” by 2049 to mark the 100th anniversary of the founding of the People’s Republic of China. And if that wasn’t enough, China is also diversifying its nuclear forces through investment in land, sea, and air-based nuclear delivery platforms, with the same report stressing that (quote): “The PLA seeks a larger and more diverse nuclear force, comprised of systems ranging from low-yield precision strike missiles to ICBMs with multi-megaton yields to provide it options at every rung of the escalation ladder.” So, China’s packing some serious firepower.

The Cracks in China's Economic Facade

China's economy, once a driving force behind its rise, is now showing signs of strain. The population is ageing, and the workforce is shrinking. The youth unemployment rate hit a record 21% in summer 2023, forcing officials to suspend data publication. The property market, which accounts for 70% of household wealth, has undergone a severe downturn. China's trade war with the US has further exacerbated economic instability, with reduced export demand and higher production costs slowing the economy. Concerning airpower, the 2024 edition of the US Department of Defense’s report concluded that (quote): “The People’s Liberation Army Air Force and People’s Liberation Army Navy together constitute the largest aviation force in the Indo-Pacific region and the third largest in the world, with over 3,150 total aircraft, of which approximately 2,400 are combat aircraft (including fighters, strategic bombers, tactical bombers, multi-mission tactical, and attack aircraft).” Combined with advancements in technological integration that have modernised its aircraft and unmanned aerial systems, China’s sights are set firmly on an air force capable of long-range airpower projection. With greater strain on pension budgets and a shrinking workforce to drive the economy, the Lowy Institute projects growth to slow to 3% by 2030 and 2% by 2040.

Peak Power: Understanding China's Energy Landscape

Despite facing domestic crises, China is pressing forward with its foreign policy ambitions, including military investment and the Belt and Road Initiative (BRI). China aims to develop a 'world-class military' by 2049 and has made significant advancements in technological integration, modernizing its aircraft and unmanned aerial systems. The BRI has broadened China's economic and political influence across the globe, with over 150 nations signing agreements under the framework. (Title): The Exception to the Rule: China’s Hard and Soft Power Projection As you may have noticed, a paradox exists in that, despite facing a litany of challenges, China is pressing forward with its foreign policy ambitions. In keeping with the Peaking Power Trap, Dan Blumenthal’s 2020 book The China Nightmare: The Grand Ambitions of a Decaying State argues that China is doubling down on its grand strategic ambitions because it is weakening. At its most basic, the theory draws inspiration from the Thucydides Trap, popularised by Harvard political scientist Graham Allison, who used it to contend that China, the rising power, and the US, the incumbent superpower, were destined for war due to their clashing ambitions and the inevitability of China overtaking. History is littered with examples of The Peaking Power Trap; just look at the 20th century… Leading up to WW1, despite its strong economic and military position, Germany was suffering from domestic political tensions and feared encirclement from rival powers Britain, France, and Russia.

The Security Implications of China's Faltering Growth

China's increasing aggression and military buildup have significant security implications. The US and its allies must close China's window of opportunity in every instance of aggression. Regional partnerships, such as the Quadrilateral Security Dialogue and the AUKUS security pact, demonstrate growing anti-China cooperation. However, the risks have never been more pronounced, and the Peaking Power Trap is nearly upon us. China's actions will have far-reaching consequences, and the world must prepare for the potential fallout. The US and its allies must close China’s window of opportunity as far as possible in every instance of aggression. The US’ “strategy of denial”, which aims to deter aggression by showing its forces could defeat a Chinese attack, is being undermined by China’s military buildup and increasing ability to blockade Taiwan. In their book Danger Zone: The Coming Conflict with China, authors Michael Beckley and Hal Brands write that (quote): “Rising powers become most aggressive when their fortunes fade, their difficulties multiply, and they realise they must achieve their ambitions now or miss the chance to do so forever.” Therefore, as “China is at a perilous moment: strong enough to violently challenge the existing order, yet losing confidence that time is on its side,” the world is hurtling down a dangerous path.

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Jackson Reed

Jackson Reed creates and presents analysis focused on military doctrine, strategic competition, and conflict dynamics.

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