Dragon Has No Teeth

DONALD WHO?:

Taiwan’s more relaxed than most of us about Trumpian deal-making (Bill Emmott, May 31, 2026, Asia Times)

So it is worth asking why Taiwan itself seems comparatively relaxed about the potential implications of the Trump-Xi summits. This may help us separate the noise that inevitably surrounds these summits from the true strategic signals that both sides are conveying.

One reason why Taiwan is less concerned than others is a simple one: it has had to learn to live with its geopolitically anomalous status for nearly 80 years now. If it got nervous every time the Chinese and American leaders talked, even ones like Xi and Trump, it would soon have a nervous breakdown.

Moreover, while certainly the People’s Republic of China has become vastly stronger in economic, military and political terms, especially over the past two decades, so has Taiwan. The Taiwanese know that they could not defeat China in a head-on conflict but they also know that they are strong enough to impose huge costs and pose high risks for China.

Ukraine’s success in resisting Russia’s invasion since February 2022 serves as an inspiration for Taiwan but most of all as a warning to China.

What matters to Taiwan is that it can keep on strengthening its defenses sufficiently to help deter an invasion.

Taiwan actually could win a head on conflict.

THE DRAGON HAS NO TEETH:

Ten China falsehoods exposed by the Trump-Xi summit (Miles Yu, May 25, 2026, Washington Times)

1. The myth of the “Thucydides Trap”

The Beijing summit revived the tired mythology of the “Thucydides Trap,” the claim that conflict between the United States and China is inevitable because a rising China is displacing a declining America. This theory is not only intellectually bankrupt, but also historically erroneous, because the rising power was defeated in the Peloponnesian war that Thucydides masterfully documented.

Xi Jinping himself is trapped not by geopolitical reality, but by Marxist-Leninist dogma, which insists capitalism is collapsing and communist victory triumphantly inexorable. The CCP mistakes dogma and propaganda for reality. America remains the world’s leading military, technological and financial power, the global hub of innovation and inspiration, the only superpower capable of shaping global security, trade and alliance environments.

China, meanwhile, faces demographic collapse, economic stagnation, mass unemployment, popular disenchantment and elite political instability. More importantly, the real divide is not “China versus America,” but communist China versus the entire free world.

THE DRAGON HAS NO TEETH:

China Is Squandering a Golden Opportunity: Why Beijing Has Failed to Exploit Trump’s Missteps (David Shambaugh and Steven F. Jackson, May 12, 2026, Foreign Affairs)

Although China’s diplomatic footprint is broad, it is not necessarily impactful. Beijing is not driving the international diplomatic agenda, and it is not the most influential power in any region of the world. It never gets in the middle of the world’s most troublesome issues or conflicts, and it rarely brokers negotiations between contested parties (as is currently the case with the Iran conflict). Beijing tends to offer anodyne calls for peace and negotiation but rarely forges direct negotiations to truly resolve conflicts. This diplomatic disappearing act is symptomatic of China’s exaggerated sense of its own global power.

Xiism is no more a viable alternative to liberalism than Trumpism is. Then again, Xi and Donald are pretty similar.

THE DRAGON HAS NO TEETH:

China’s Long-Promised Consumer Boom Is a Mirage (Anne Stevenson-Yang, 3/13/26, NY Times)

Even if Communist Party leaders want to unleash more spending, formidable obstacles stand in the way, including a work force increasingly trapped in insecure, low-wage employment, a rapidly aging and shrinking population and a weak social safety net that encourages people to save for emergencies.

China’s people, perhaps more than at any time in the last few decades, are in no mood to go out and splurge. Many have been airing growing anxiety online, posting about falling incomes and scarce jobs. The average income was just over $500 a month in 2025. Unemployment is high.

A fundamental shift that has taken place in China’s labor market is the root cause of these problems.

Since the early 2010s, intensifying global economic competition, automation, the pandemic-era closure of countless businesses, slowing economic growth and China’s protracted property slump have all combined to eliminate millions of manufacturing and construction jobs. This has driven countless workers into a growing service sector that requires fewer skills and offers lower pay.

An estimated 200 million people, or at least one-quarter of China’s work force, are now engaged in insecure “gig” employment — delivering meals or packages, driving ride-hailing cars, selling goods online or doing other short-term work. According to a study last year, nearly half of gig workers have little to nothing in the way of a social safety net — which would include health care, a pension, unemployment benefits, maternity benefits and secure housing. The problem is worsened by chronic government underinvestment in social services. On top of that, advances in technology have given companies a precise view of seasonal demand and simplified recruiting, enabling them to hire and fire workers as needed.

Adding to worker insecurity is China’s household registration system, which restricts access to social services like schooling and health care outside one’s hometown. This effectively ensures that people from China’s vast countryside serve as cheap migrant labor for megacities like Beijing, Shanghai and Shenzhen. Reform of the registration system has been discussed for decades, but eliminating it would shift enormous welfare costs onto those cities, which currently reap benefits from migrant labor without shouldering social costs.

These are hardly a foundation for a vibrant consumer economy, and the future is not looking better.

SMAUG DIES IN THE END:

The rising risk of China turning Japanese: Beijing’s stimulus push may delay crisis, but without deeper reform, China risks a slower version of Japan’s long stagnation (Ronny P Sasmita, February 18, 2026, Asia Times)

Whether acknowledged or not, what is unfolding in China today bears a striking resemblance to Japan in 1989.

China’s property sector, which served as the primary engine of growth for two decades, has become a heavy drag on the economy. Developer giants such as Evergrande are not merely failed corporations; they symbolize the bursting of an asset bubble far larger than anything Japan experienced.

China is also beginning to show symptoms of Richard Koo’s balance sheet recession, this time at the household level. Middle-class families, with roughly 70% of their wealth tied to property, feel poorer as housing prices fall. Consumption slows accordingly.

At the same time, deflationary pressures are intensifying across the economy. Should China slide into a deflationary spiral of the kind Krugman describes, massive private and local government debts will become even more burdensome as the real value of debt rises while prices fall.

THE DRAGON HAS NO TEETH:

China Has Screwed Up Really, Really Badly (Victor Tangermann, Jan 21, 2026, Futurism)

The country’s population has been shrinking since 2022, and judging by the latest numbers, the trend is bound to continue. And as the population continues to age, hundreds of millions could soon be leaving the workforce — a demographic crisis and ticking time bomb in one.

THE DRAGON HAS NO TEETH:

China Looks Strong. Life Here Tells a Different Story. (Helen Gao, 11/13/25, NY Times)

Behind the orderliness of everyday life, a quiet desperation simmers. On social media and in private conversations, there is a common refrain: worry over joblessness, wage cuts and making ends meet. […]

These days, there is a sense of bitter anger among the people at being the voiceless victims of the state’s obsession with world power and beating the United States. That sentiment is likely to grow. The latest five-year plan — the government’s blueprint of economic priorities — that was released last month makes clear it plans to double down on prioritizing national power over the common good.

In April, as the tariff war with the United States intensified, a People’s Daily editorial argued that Beijing can resist American bullying thanks to systemic advantages such as China’s ability to centralize resources and pour them into accomplishing national goals. The backlash on the Chinese internet was swift. While the government boasts, a viral social media post pointed out, everyday struggles like finding work, putting food on the table and educating children are “fraught with difficulty.” Winning the trade war with the United States means “preparing to sacrifice some of the people,” the author wrote. Censors soon blocked the post and others like it.

Years ago, Chinese people would have cheered a People’s Daily editorial like that out of the reflexive nationalism that the government has instilled for decades. That patriotism is nearly drowned out today by those who vent over the problems they face.

Youth unemployment is so high that last year the government changed its calculation methodology in a way that produced a lower number. Even the new figure remains alarmingly high. An estimated 200 million people get by in precarious careers in a gig economy. Consumers, many of whom have seen their net worth shrink in an intractable housing market crash, are cutting back on spending, trapping the economy in a deflationary spiral.

The sense of economic insecurity is leading people to forego marriage and starting families, worsening a national decline in population. Popular frustration also is sharpening the divide between the haves and the have-nots — hardening public resentment against those who are perceived as parlaying economic or political connections into opportunity while most people face dwindling prospects. And mental health problems are believed to be rising, as evidenced by a spate of indiscriminate stabbing sprees and other violent attacks in the past couple of years.

It seems clear that Beijing can no longer count on knee-jerk patriotism to underwrite its increasingly assertive stance abroad. In September, when the Chinese Communist Party staged a lavish military parade to commemorate the 80th anniversary of the end of World War II, many people wondered aloud why that money wasn’t instead spent on addressing the difficulties of ordinary people.

The government recently began cracking down on social media content it considered “excessively pessimistic” — a clear sign it is concerned about this public unease undercutting its agenda. But suppressing criticism instead of addressing its causes will only deepen the disconnect with the people and strain the balancing act that the state has tried to strike between its foreign policy priorities and the domestic support it craves.

THE DRAGON HAS NO TEETH:

The End of the Chinese Dream (Yi Fuxian, Mar. 10th, 2025, Project Syndicate)

Back in 2016, I told the New York Times that China’s aging population and shrinking labor force would prevent its economy from overtaking America’s – a conclusion I had arrived at in the 2007 and 2013 editions of my book Big Country with an Empty Nest. Chinese authorities were not happy. I immediately went from being a state guest to a name on the government’s blacklist. Then, in 2019, I angered the authorities again by publishing a commentary bearing the headline: “Worse than Japan: how China’s looming demographic crisis will doom its economic dream.”

According to the dominant narrative at the time, the “Chinese century” was “well under way” (as The Economist put it). Nonetheless, my findings met with a receptive audience. In the introduction to a November 2020 Brookings Institution book on “the future of US policy toward China,” my commentary was the sole reference listed. (The author, Jeffrey Bader, had been one of the principal architects of the Obama administration’s “pivot to Asia.”) Since then, the dominant narrative has shifted, with many more analysts warning of China’s “Japanification.”

Japan’s experience has confirmed that demographics matter for economic growth, and this will remain the case regardless of whether one looks at Germany, France, China, or any other country. Owing to a rapidly growing workforce and a young population, Japan’s GDP grew from a mere 9% of US GDP in 1960 to 73% in 1995, and its per capita GDP grew from 17% of America’s to 154% in the same period. By 1990, Americans had come to regard Japan as their chief rival, with polls showing that three times more Americans feared the economic threat posed by Japan than the military one posed by the Soviet Union.

Yet Japan’s GDP growth rate has been lower than America’s since 1992.

Fear of a rising China is just a function of Sinophobia.

CAN’T HAVE A CLASH OF CIVILIZATIONS WHEN THERE IS ONLY ONE:

Why Is Xi Not Fixing China’s Economy?: Explanations from insiders range from ignorance to ideology. (Scott Kennedy, 6/30/24, Foreign Policy)

There were four views that commonly came up on why Xi and other top leaders haven’t taken a different approach, which we might dub “The Four Nos” in Chinese political style. The first is, “He doesn’t know.” Some have speculated that Xi is being kept in the dark about the sour state of the economy by cadres who do not want to give him bad news for fear that he would blame the messenger. And so, the thinking goes, they only provide him with sanitized, positive reports. […]

The second idea, “He doesn’t know what to do,” is based on the premise that Xi and other top leaders are well informed but they are facing a variety of problems that are not easy to fix. The list is long—the real estate crisis, ballooning local government debt, the plummeting fertility rate, rising inequality, disaffection in Hong Kong, and expanding tensions with the West and most of China’s neighbors—and solutions are far from simple. […]

The third option, “He doesn’t care,” is rooted in the hypothesis that Xi’s top priority is strengthening the CCP’s monopolistic hold on power and his own personal political dominance. Although the media shows him visiting factories and holding discussion sessions on various economic challenges, his own daily schedule may be dominated by managing security and political issues, including personnel decisions, not the economy. […]

The final answer, “He doesn’t agree,” speculates that the issue is not Xi’s insufficient access to information, indecisiveness and incompetence, or a lack of interest but rather that he and his lieutenants disagree with the criticism that the current policy line is incorrect and not up to the challenge.