On Geopolitics

The End of Strategic Luxury for China

Zhixing Zhang
Senior East Asia Analyst, Stratfor
Feb 14, 2019 | 23:07 GMT
As its economy matures, China has attempted to move up the value chain in manufacturing, beyond industries such as textiles and into high-tech development.

A worker produces fabric in a textile factory in Binzhou in China's eastern Shandong province. A trade war with the United States has restricted options for Chinese leaders looking to restructure its economy away from dependence on low-level manufacturing, which was once its backbone.

(STR/AFP/Getty Images)

When Chinese President Xi Jinping declared his country's "era of national rejuvenation" at the 19th Communist Party Congress in 2017, he saw a historical mission awaiting him. China had gone from a "century of humiliation" into seven decades of rehabilitation through internal reconsolidation and economic growth. The country had developed a massive economy and was halfway to its goal of ascending into a global power; Xi saw it as his job to take it the rest of the way. But though Xi may have had a clear mission informed by his predecessors, the fact is that he presides over a China that sits at a major crossroads domestically, politically, economically and globally. China has hit the point in its economic transition where it must adapt to slower growth and adjust to a rockier economic situation. Chinese leaders are finally facing the constrictions stemming from the end of the country's previously near-unrestrained...

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