China's economy is currently facing a profound and multifaceted crisis that has captured global attention.

Economically, this crisis stems from years of overexpansion in real estate, excessive debt, and supply exceeding demand. Local governments, in pursuit of GDP growth and personal promotion, have overborrowed and blindly expanded infrastructure and investment. The zero-COVID policy over the past three years caused people to lose trust in the government. Coupled with the recent suppression of private enterprises, both consumers and producers lack confidence and refuse to become “leeks” for the government to harvest.
Pressure from the U.S. and other nations could push the CCP to reform, benefiting both the Chinese people and the world.
Currently, the Chinese Communist Party’s (CCP) economic stimulus approach remains conservative, focusing mainly on helping local governments repay debts and stimulating investment. However, the CCP has not shown the resolve to dispense cash to stimulate consumer spending, reasoning that it must not “encourage welfarism.”
While commentators have focused their analysis on the economic factors in this malaise, the political aspects of China's economic downturn are no less important.
China’s economic decline is not cyclical; it is institutional — a sign that the “China model” has reached its limit. What is the China model? I summarize it as follows:
National mobilization system: The CCP’s greatest strength lies in its ability to mobilize the entire nation’s resources to develop critical industries, such as high-speed rail, solar power, and electric vehicles. Once a key industry is identified, foreign competition is restricted, selected domestic enterprises are supported, the state helps acquire foreign technologies, and China’s vast market size is leveraged to reduce unit costs quickly and dominate global markets.
Partial legal improvement: Since the late 1970s’ reform and opening up, the CCP gradually established commercial laws that pr...