The Rise of China

A peasant economy in 1980 became the largest manufacturing power in history within a generation.

The brief

In 1980, China's per capita GDP was about $200, lower than much of sub-Saharan Africa. On the World Bank's later $1.90-a-day measure, close to eight hundred million Chinese people lived in extreme poverty, most of them peasants tilling collective land. By the mid-2020s, China is the world's largest manufacturer, producing nearly a third of global manufacturing output — more than the next four producers combined; as of 2026 it is the second-largest economy at market exchange rates and the largest by purchasing power, the world's biggest trading nation, and the largest holder of foreign-exchange reserves. It is America's principal technological rival: leading in electric vehicles, competing fiercely in artificial intelligence, and still trailing at the leading edge of semiconductors. No country has ever grown that fast, for that long, on that scale. Roughly 800 million people were lifted out of extreme poverty — the largest such episode in human history.

The mechanism was a deliberate, decades-long project. Deng Xiaoping's reforms after 1978 dismantled collective farming and opened the country to foreign investment in special economic zones like Shenzhen — a fishing village that became a megacity. The 2001 entry into the WTO embedded China in global supply chains and unleashed an export boom. The one-child policy, one of history's most far-reaching demographic interventions, temporarily inflated the working-age share of the population — a one-off demographic dividend. An undervalued currency, vast cheap labor, state-directed credit, and tolerated appropriation of foreign intellectual property enabled rapid technological catch-up. The political settlement was equally deliberate: the Communist Party traded steady delivery of prosperity for the deferral of liberalization — the implicit deal that survived even the upheaval of 1989. Under Xi Jinping since 2012, that bargain has tightened: more state, more surveillance, more nationalism, more party, and a turn from collective leadership toward one-man rule. The growth model — debt-fueled construction, an over-built property sector, export manufacturing, the now-expiring demographic dividend — is visibly running out of road, with the population shrinking and aging. China in 2026 is prosperous, anxious, demographically aging, technologically formidable, and increasingly assertive.

Why nowThe American–Chinese strategic competition is the defining geopolitical fact of the 21st century. It will shape the architecture of the global economy, the future of Taiwan, the rules and balance of artificial intelligence, the pace of the climate transition, and whether the next forty years repeat the Cold War template — two blocs, two systems — or invent a new and more entangled one, given how deeply the two economies remain intertwined despite the talk of decoupling. How a confident-but-aging China manages its slowdown may matter more for the world than how fast it once grew.