United States and other advanced industrial nations to keep factories running and people working even as, particularly in the wake of the global pandemic, the United States and others seek to reduce reliance on Chinese manufacturing.178 Notwithstanding the CCP’s lagging efforts to establish the yuan as a global reserve currency, China depends on the American dollar to settle many international transactions. And China’s advanced manufacturing uses sophisticated microchips and other high-value technological goods from the United States and other advanced industrial nations.179 This leaves critical sectors of China’s economy vulnerable to temporary disruption by foreign governments’ imposition of export controls.180
Furthermore, while the extent in China of the economic contraction caused by COVID-19 is uncertain, the pandemic’s consequences are bound to exceed what Beijing endured in the aftermath of the 2008 financial crisis. Stimulus measures stretching across more than a decade have taken their toll on China’s corporate sector while saddling the government with immense debt.181 In response, China has imposed strict lending standards on its banks, the efficacy of which is to be determined.182 While many Chinese companies depend on capital markets in the United States, Britain, and other countries, some use secondary listings in Hong Kong or Shanghai to insulate themselves from limitations on access to foreign capital markets.183 Meanwhile, China’s manufacturing sector is likely to keep contracting due to sharp drops in consumer demand at home and abroad. Declining manufacturing, diminished consumption, and limited stimulus tools would depress GDP and increase unemployment,184 yielding further dissatisfaction and social unrest.185
A booming Chinese economy creates its own vulnerabilities. While the last several decades show that greater economic freedom does not guarantee political liberalization, China’s powerful economic engine, combining choice with state command and control, may still encourage a frame of mind within the middle and upper-middle class that is at odds with authoritarian government. The opportunity to choose that a growing economy fosters and the prosperity it unleashes tend to produce a taste for more freedom. Making decisions about work and property can increase citizens’ expectations for choice in other realms while producing greater affluence. Choice and affluence, moreover, tend to heighten the demand for the protection of the fruits of one’s labor through property rights and laws that are settled, public, and fairly applied. Alternatively, as some have argued, middle- and upper-middle-class urbanites may continue to support the CCP because of the comfort and wealth they have achieved under the party’s dominion even while dissatisfaction mounts among the hundreds of millions of rural citizens
