STRATEGIC

Is the World Falling Apart (And How Would We Know)? 45
Moreover, in the past year, China has put some of its nuclear forces to
sea aboard a new generation of submarines (Type 094 JIN-class) that
carry a wholly new class of ballistic missiles (JL-2s).
This combination of hardening, dispersal, mobility, and penetrability
significantly reduces the probability that even the most massive
and accurate of strikes (conventional or nuclear) would destroy
the entirety of China’s nuclear force. In short, the modernization of
China’s nuclear weapons arsenal would appear to provide Beijing with
a key capability that it has long sought and was lacking as recently as
the mid-1990s: a survivable and thus assured retaliatory nuclear capability.
19 While disconcerting, this capability is not automatically bad
for the United States because to the extent that it reassures Beijing, it
reduces any incentive for a Chinese first strike.
In terms of its standing in the global economy, China’s economic
power will not outstrip Washington’s in the short term, certainly not if
its current downturn persists. Its three decades of state-managed juggernaut
growth have created overinvestment in industry and public works,
meager domestic consumption, capital misallocation, and an overhang
of debt. The stability of its banking sector is in question because Beijing
requires state banks to lend to insolvent state corporations and regional
and local governments, leading to mounting nonperforming loans.
Imprudent interference in stock market performance has reduced confidence
in the quality of government economic management.
As its growth rate declines, trading partners from Brazil to Australia
whose economies depend on exporting raw materials to China see
their development strategies called into question. Yet China remains a
major investor in and lender to the developing world, and its “One Belt
19 For in-depth treatments of China’s quest for and realization of a survivable modern
nuclear deterrent force, see Fiona S. Cunningham and M. Taylor Fravel, “Assuring Assured
Retaliation: China’s Nuclear Posture and U.S.-China Strategic Stability,” International Security,
Fall 2015; Michael S. Chase, “China’s Transition to a More Credible Nuclear Deterrent:
Implications and Challenges for the United States,” Asia Policy, July 2013; M. Taylor
Fravel and Evan S. Medeiros, “China’s Search for Assured Retaliation: The Evolution of Chinese
Nuclear Strategy and Force Structure,” International Security, Fall 2010; and Thomas J.
Christensen, “The Meaning of the Nuclear Evolution: China’s Strategic Modernization and
U.S.-China Security Relations,” Journal of Strategic Studies, August 2012.