Two megatrends have shaped American life since the 1980s: the rise of China and the hollowing out of American industry.
China’s economic boom prompted a thousand predictions — that it will soon surpass us as an economic power, that the 21st century is going to be a Chinese century, that America is an aging, decadent nation destined for second place.
The hollowing out of American industry fed the sense that capitalism is betraying the middle class. America has a parasitic financial sector, but we don’t make things anymore. Manufacturing jobs got outsourced to China and Mexico, and wages stagnated.
These two trends contributed to the sense that America is in decline — to the angry, gloomy pall that has settled over political life.
But it’s beginning to look as if those two megatrends are reversing.
China looks not like a growing dynamic power but like a troubled, stagnating one. Growth rates are falling. The unemployment rate for those ages 16 to 24 in urban areas is at a demoralizing 21 percent. Private investment is sluggish. A forecast from Bloomberg Economics now projects that the size of the Chinese economy will not successfully surpass the size of the American economy — despite its vastly greater population.
The causes of China’s stagnation are myriad and deep: an overinvestment in real estate, the decline in foreign investment as the state become more menacing, the decline of exports, the demographic doom spiral. Since 2016, the number of births in China has fallen by nearly 50 percent.
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