Commentary | Annalise Chang, Carlineissa Jean Francois, Masaharu Kai, Tom Le, and Ellie Sun, China’s Liabilities and Revising the Rising Power Narrative
From June 24 to July 31, the US will be participating in RIMPAC 2026, the 30th iteration of the world’s largest international maritime exercise designed to enhance interoperability, improve disaster response, and prepare for potential combat scenarios. The biennial event will host 30 nations, but noticeably absent is China, which the US disinvited in 2018. The US and China are locked in a great power competition over AI, military capabilities, nuclear weapons, the economy, and the hearts and minds of the global south. And it’s a competition that the US is losing, as some analysts would lead us to believe. China’s strengths, which are many, lead many to underappreciate significant liabilities that compromise its ability to fully revise the global order. China’s demographic, economic, environmental, and reputational weaknesses may be far more destabilizing than analysts have recognized, and understanding China’s liabilities can temper alarmism and better prepare policymakers for the instability a weak China brings.
China’s economic and military strength can be credited to the 1.4 billion people that make up the nation. The country’s economic system has been built on a growing working-age population. However, in 2022, the population peaked and has been dropping since. The fertility rate is 1.0, one of the lowest in the world and less than half the replacement level. If China follows the trends of most countries in the world dealing with fertility problems, it will not be a trend that can be reversed. The immediate consequences of China’s demographics are not size, but the poor sex ratio and rapidly aging population, which makes reversing decline difficult and introduces major economic liabilities. And to solve this requires complex socioeconomic solutions that no state has solved, such as later marriages, later births, and fewer births. What makes China’s problem unique is that it was exacerbated by destructive social engineering through the one-child-policy, which introduced a host of demographic issues not experienced by other states.
The poor demographics will impact the size, readiness, and funding of the PLA. Beyond the military, the aging population will put a strain on social spending programs, and when those programs fail, people fall into the gap, resulting in homelessness and earlier deaths as seen in other aging East Asia economies.
China’s transformative economic growth has fueled its global ambitions, resource consumption, and military buildup. This export-driven model is built on growth of the consumer population, a productive labor force, and innovation - all of which are compromised by poor demographics.
The record low GDP growth target of 4.5-5% announced by the Chinese government in March 2026 - under 5% for the first time since 1991- signals unignorable economic stagnation in China. While the enormous success in its trade sector that marked $1.2 trillion trade surplus in 2025 despite the US tariffs, the heavily export-driven economy carries risks in the long run. While experts have long suggested the need for a pivot from relying on exports and construction to enhancing consumer spending, the domestic economy has experienced deflation. For instance, manufacturing, the main engine of Chinese economic growth, has been forced to lower price levels because of excess factory capacity and high competition, progressively shrinking firms’ profits across industries. Moreover, weak demand among consumers is lowering the price level of goods and services, further accelerating this deflationary trend. Once one of the strongest economic drivers in China, housing prices have also decreased by 30% compared to its peak in 2021. The housing price collapse is not merely decelerating the growth of the housing industry; diminishing house values are leading households to feel poorer and spend less, pushing down consumer demands across the economy. Structurally, the Chinese economy does not protect its citizens as there are few avenues to safely park assets and engage with foreign markets.
Chinese officials are aware of the economic stagnation, the solution is not clear as there is tension between empowering consumers and preserving central control of the economy. In 2025, Han Wenxiu, the deputy director of the Central Financial and Economic Affairs Commission, expressed that the primary goal of the next five-year plan is to maintain a “reasonable” economic growth rate and significantly increase the percentage of household consumption of GDP. Given this goal, the Chinese government has implemented policies such as subsidies and mortgage rates cuts to expand consumptions and mitigate the economic downward pressure that the housing price drop has caused. Yet, the effects of these policies are limited - not only because consumers tend to conservatively save and spend less, but also the government’s commitment to this economic scheme is questioned. Encouraging consumption through substantial public subsidies means China will vastly change its historical economic structure that allowed the Chinese economy to grow rapidly because of low wages and interest rates. As such, Beijing seems to be wary of risking the economic and political stability while increasing preexisting large debts.
China’s rapid economic growth not only has slowed, but has introduced significant environmental costs, including air and water pollution and greenhouse gas emissions. These costs will further harm an aging population and stress the economy.
According to one study, ambient PM2.5 pollution leads to 2.3 million deaths in China, accounting for 19.4% of total deaths. The most vulnerable populations are children under 5 and adults over 70, with men facing a higher risk from outdoor exposure. Other studies find that pollution stifles productivity, decreases consumption, and adds downstream environmental cleanup and healthcare costs.
Environmental costs are rarely contained within a country, as the cost of dealing with them can be passed on to the price of goods or the pollution literally crosses borders. China’s neighbors, including Japan and South Korea, have also expressed concern over acid rain and smog affecting their populations.
These domestic liabilities will stymie China’s efforts to overcome the US as the global hegemon, but external forces such as its global reputation demonstrate that power is not just taken but given. Recent polls have shown that China’s favorability has overtaken the US in some countries but still does not enjoy a majority popularity rating around the world. Enduring accusations of debt trap diplomacy, strong arm tactics in disputed waters, poor human rights record, and the weaponization of the economy over security issues only make states wary of a global order led by China. And despite its many soft power efforts, there is a clear North-South divide and the countries that do not favor China tend to be major global players that have an outsized influence in the global economic order, such as Japan, South Korea, the United States, the EU, and India. The US’s primacy has fallen from its adventurous policies and poor fiscal policies at home more so than from China’s export-focused rise.
Washington has spent a lot of its political, economic, and security resources to constrain a rising China, but more should be considered on how to deal with an ambitious but compromised rival that cannot address enduring structural problems at home. Chinese government leaders may seek hawkish politics abroad to deflect from problems at home. Or the intentions can be less insidious and the party’s inability to sustain a level of productivity, trade, and investment that much of the world relies on will lead to significant instability abroad. China has shown greater capabilities and willingness to be a global leader, but the mounting liabilities suggest it is no sure thing. There is no global order in which China does not play a great role, thus, “defeating” China in a great power competition fails to appreciate that global problems can be solved with the cooperation of China, or exacerbated by China, whether from a position of strength or weaknesses.
Annalise Chang is a senior at Pomona College majoring in Politics and Asian Studies. Her current work explores international security in East Asia, spanning regional alliances, critical mineral resilience, and disaster response policy.
Carlineissa Jean Francois is a senior at Pomona College majoring in International Relations.
Masaharu Kai is a senior at Pomona College majoring in Philosophy, Politics, Economics (PPE) and Mathematics. He was a visiting student at the University of Cambridge during the 2026 Spring semester.
Dr. Tom Le is Associate Professor of Politics at Pomona College. His current research includes demographics and security, smart cities, and war memory and reconciliation. Le is the author of Japan’s Aging Peace: Pacifism and Militarism in the Twenty-First Century (Columbia University Press, 2021), which was recently translated as 『日本老いと成熟の平和』 (Misuzu Shobo, 2025).
Ellie Sun is an undergraduate student with research interests in Asia-Pacific international relations.
To cite this essay, please use the bibliographic entry suggested below:
Annalise Chang, Carlineissa Jean Francois, Masaharu Kai, Tom Le, and Ellie Sun, “China’s Liabilities and Revising the Rising Power Narrative,” criticalasianstudies.org Commentary Board, July 14, 2026; https://doi.org/10.52698/ZKTW3972.