China Today

The basis of the China Communist Party's hold on power since Deng is based on persuading the public to trade political say for prosperity. That has worked for several decades, which have seen dramatic economic growth.

I think it is now clear that the era of strong economic growth in China is ebbing. One has only to look at the dramatic decline in commodity imports to China from Latin America and Australia to see that China is not the growth engine it once was. As the aging of the Chinese population caused by the one-child policy takes hold, China is losing low-end manufacturing business to lower cost countries.

Another part of China's problem is that much of its growth has been financed by heavily indebted state-owned enterprises and local governments. These debts run back to China's government-owned banks, and hence the central Chinese government. Much of this debt is for real estate investments that may not be sound.

The recent gyrations of the Chinese stock market is further evidence of Chinese economic and political weakness. After a very strong increase in stock prices, stocks recently plunged. The Chinese government took a series of steps to increase the flow of funds into the market and to decrease the supply of stock available. These have succeeded, temporarily, in stabilizing the market at quite some cost. Apparently the political fall-out of Chinese citizens losing money in stocks was too painful for the Communist Party to bear. This is not the action of a confident government.

Similarly, the arrest of civil protesters and their lawyers on vague and trumped-up charges is an obvious attempt to bully the Chinese people into silence, if not acquiescence. It's attempts to control Chinese access to the internet and social media betray nervousness.

The concentration of central power in the hands of one man, President Xi, means that it will not be possible to blame others as China's economic issues become more evident.

Seen in this light, the "anti-corruption" campaign and the military moves in the South China Sea are both aimed at shoring up Xi's power by appealing to Chinese nationalism.

A rising China with strong economic growth poses one set of problems for American foreign policy. A China of slowing economic growth may pose a whole different set of issues.