Many of us view China as an unbeatable Leviathan. It might be more accurate, though, to call it a Goliath. Despite the strength it’s projecting into all four corners of the globe, it has serious systemic weaknesses, meaning that well-aimed pressure can topple it.

Sunday is my catch-up day, which is why I only now saw a Gordon Chang article from early April addressing China’s weaknesses. Two weeks’ time, though, hasn’t made what Chang wrote stale. Instead, it’s as appropriate now as it was when it was first published.

Chang points out that, while China looks like the Borg (perfectly integrated and overwhelmingly strong), it has serious problems that the West can exploit. This means that, when Mark Milley, the quisling Chairman of the Joint Chiefs of Staff, mournfully says that there’s nothing we can do about China’s growing nuclear program, he’s just wrong. (Of course, when it comes to Milley, don’t forget that he promised to give China a heads up if Trump decided to act against it. In other words, it’s not clear where his allegiance lies).

Image: Vacant property in China. YouTube screen grab.

In fact, China has several problems that mean its cash flow is more limited than most people realize:

“The one resource which Xi Jinping’s ambition has overreached is cash,” Gregory Copley, president of the International Strategic Studies Association and editor-in-chief of Defense & Foreign Affairs Strategic Policy, told Gatestone. “Beijing cannot, in the short term, provide the cash needed to dominate the Middle East, Africa, Latin America, and other places.”

The fundamental problem for the audacious Chinese ruler is that China’s economic growth is stumbling. China’s official National Bureau of Statistics reported that gross domestic product (GDP) last year grew 3 percent, well below the regime’s announced target of “around 5.5%.”

Official statisticians minimized inflation, thereby overstating last year’s economic output. In reality, China’s economy in 2022, after price adjustments, almost certainly contracted, perhaps by as much as 3 percent.

China’s government has been boasting about its robust economic growth, writes Chang, but that’s because China is gaming numbers about domestic consumer demand. Objective analysis based upon such things as airline passenger traffic, box office revenue, and prices on online sites tells another story:

Anne Stevenson-Yang of J Capital Research points out that airline passenger traffic for January–February was off 23 percent compared with the same period in 2019, the last pre-COVID year; box office revenue, a closely watched indicator, was down 13 percent for the Jan. 1–April 4 period, again compared to 2019; and the price of sports shoes has been dropping rapidly on the popular Alibaba sites of Taobao and Tmall.

Moreover, nothing has changed in the Chinese real estate market. China still has billions of dollars in vacant, developed property. CNN optimistically wrote last fall that China’s real estate market was back on track, but a few months later, in February 2023, CNBC looked to IMF information showing that China’s real estate market is still in trouble. This video from March vividly illustrates the problem.

By the way, governments always warp and eventually destroy the real estate market. American government intervention in the real estate market led to the 2008 real estate collapse. Biden is poised to interfere again, via regulation not legislation, with his plan to make people with good credit pay more for mortgages to subsidize people with bad credit.

Obviously, the Biden plan will chase good money out of the real estate market and, as happened in the lead-up to 2008, will increase the number of people who have no business buying homes because they’re terrible credit risks. In addition, it’s a tax and, absent legislation, should not be allowed to stand for a single minute. But back to China….

China’s other problem is one few people speak about, but it’s worth noting: When the Chinese make an effort, there are no people more meticulous. When they don’t, and this may be because of 70+ years of communism, they churn out garbage.

Around the world, the infrastructure they’ve built in poor countries is already falling apart. Eventually, those countries will stop giving China access to that same infrastructure and will default on any loans. Moreover, if the Chinese show the same carelessness with their nuclear projects…well, I don’t want to think of how bad that outcome could be.

We err greatly if we downplay the threat China poses. However, we err equally badly if we overplay the threat it poses, paralyzing our ability to respond in productive ways.