The Chinese Communist Party (CCP, 中國共產黨) has always been an organization obsessed with metrics. Over the last decade, this obsession has come to dominate the People’s Republic of China (PRC) grand strategy. The party seeks encompassing quantitative measures to measure the progress of paramount leader Xi Jinping’s (習近平) vision of the “great rejuvenation of the Chinese nation” (中華民族偉大復興) into a “great modern socialist country in all respects” (全面社會主義現代化強國).
For instance, the 2049 goal to achieve rejuvenation is predicated on being the world leader in a particular comparative metric, comprehensive national power/strength (CNP, 綜合國力). party theorists have ascribed a formula for CNP:
CNP = [E+M+(Aa+Ab)]-1-α × Sβ × Q
Where “[E+M+(Aa+Ab)]” is hard power, defined as the additions of economic power, military power, basic science, and applied science; “-1-α” is negative risk factors from internal turmoil; “Sβ” is soft power as measured by prestige, perceived “democratization”, and influence rankings; “Q” is strategic competence.
Each of these various factors are then broken down into further quantitative assessments of positional measurement: for instance, military power as an essential component of hard power needs to be “world class” (世界 一流軍隊) by mid-century. Thus, the CCP’s strategic planning—probably unique among the other great national polities—is determined by evaluations of international position as opposed to the pressures of domestic politics. In short, this is the expansion of military operational net assessment to a grand strategic level.
Accordingly, now that the 2024 US election cycle has come to a close, PRC policymakers are likely engaging in a renewed net assessment of the strength of the United States relative to China. The PRC faces significantly different domestic and international circumstances as compared to the beginning of the Biden Administration, let alone the first Trump Administration. Calculations of CNP will be foremost in the mind of the party leadership when determining the methodology of confronting the second Trump Administration, with the PRC’s Taiwan policy increasingly becoming tied to the prospects of the US-PRC great power competition. In this article, I will look at the hard power conditions that Chinese net assessment must take into account—particularly within the context of developments over the last administration—and the implications for Taiwan.
The Storm Before the Storm
The first factor of hard power is economic power. Within the context of the CNP, this should be more accurately considered as the perception of relative economic power. While the PRC economy has continued to grow, perceptions of relative strength have drastically changed over the last four years.
On July 1, 2021, Xi announced that the PRC had completed the building of a “moderately prosperous society” (小康社會). This was a phrase first used by Deng Xiaoping (鄧小平), and codified into Party terminology by Jiang Zemin (江澤民) in 2002. The next step was to “basically realize socialist modernization” by 2035, with the creation of a “great modern socialist country” by mid-century.
At the time of his announcement, the PRC economy was expected to experience a strong post-COVID recovery of 8.5 percent, before settling into a pre-COVID growth rate of roughly 5.5 percent. This would be enough for the PRC economy to catch up to the US economy in the 2030s, and form the basis of “basically realizing socialist modernization.” However, this prediction was badly scrambled by an onslaught of economic challenges. The first of these was the resurgence of COVID-19 in 2022, accompanied by the institution of draconian lock-down measures, nation-wide protests over the measures, the rescinding of the measures, and the dramatic surge in COVID-19 infections/deaths in the winter of 2022. The costly pandemic measures were largely borne by the provincial governments, which saw shockingly high increases in debt as a result—a particular blow to provinces that were already poorer to begin with, such as Inner Mongolia.
Second, China’s local provincial governments were (and continue to be) overly dependent on the real estate market bubble to finance their spending. With the 2021 default of the massive Evergrande Group, the PRC’s second-largest real estate conglomerate, the bubble began to burst. However, Xi’s distaste for directly bailing out the massive real estate sector led to additional heavy pressure on the PRC financial sector. Faced with the prospect of a simultaneous banking and real estate collapse, Xi finally moved this year to conduct relatively minimal debt swaps and monetary quantitative easing. However, these measures are still insufficient to the scale of the problem (for instance, the 10 trillion yuan debt swap of local provincial debt provides only minimal relief against the IMF estimates of 60 trillion yuan of local provincial debt in 2023). Thus, instead of a post-COVID recovery, the PRC economy went into a period of slower growth.
In this period of sluggish economic activity, Xi has tried to compensate for the decline in domestic spending by ramping up exports—a policy which has already produced significant backlash within the EU, and will likely be heavily targeted by the incoming US administration.
Xi GPT vs ChatGPT
The slow-down in the PRC economy is made more painful for Xi by the current state of the US-PRC tech race. In September 2023, with the PRC economy deep in the real estate crisis, Xi called upon the nation to mobilize “new quality productive forces” (NQPF, 新質生產力) in concert with his previously announced “comprehensive national security” concept (CNS, 整體國家安全). NQPF investment would be directed by a centralized “new national system” (新型舉國體制), headed by a Party commission to ensure CNS—as opposed to Silicon Valley-like private investment. The difference between Xi’s vision of the NQPF and prior technological industrial strategy is that incremental development and gross domestic product (GDP) growth are not the primary goals. Instead, the aim is to dominate “disruptive” technologies that will allow the PRC to leapfrog the economic, military, and demographic constraints he feels are imposed by the current international system, and in turn allow the PRC to monopolize the global marketplace in service of state hegemony.
The party has identified 17 broad fields as NQPF future industries. Specific technologies highlighted by officials and PRC media are AI, space, and “green tech” such as batteries, as exemplars of the NQPF. In two of the three techs, the PRC has been stunned by the US tech industry over the last few years.
First, AI: Silicon Valley’s 2022 roll-out of a large language model generative AI, ChatGPT, shocked PRC tech entrepreneurs, many of whom had assumed a closing tech gap between the United States and People’s Republic of China. Initial attempts at catch-up ended in failure: PRC search giant Baidu’s answer to ChatGPT, ERNIE, was widely panned in its 2023 roll-out. Despite continued PRC tech entrepreneur assessments that the PRC was 1-3 years behind the United States in generative AI development—and continuing to fall behind—the PRC continued focusing its efforts on AI-empowered surveillance and AI models trained on Xi Jinping Thought.
US space tech has also proved to be an unpleasant, and even more insurmountable, shock to the PRC. Since SpaceX first demonstrated the viability of reusable rocket engines in 2017, the PRC has tried to copy SpaceX’s rocket recovery technology, and encouraged both domestic SpaceX clones and clones of SpaceX launch platforms, such as the Long March 9 (a clone of SpaceX’s Starship). However, Long March 9 is only expected to begin testing in 2033, while Starship already has had six test launches with an official launch in September 2025.
Even in the one area where the PRC has an unquestioned lead—lithium-ion battery technology— the party remains uneasy. The PRC’s monopolization of the lithium-ion battery supply chain, along with its integration into the PRC’s rapidly expanding electric vehicle market, means that PRC companies are heavily disincentivized from adopting next-generation solid-state/semi-solid-state batteries. The PRC is at risk of being “leap-frogged” in turn, and the party knows it.
Image: Xi conducts an inspection visit of PLA Rocket Force Brigade 611 (六十一基地611旅), (October 17, 2024). PRC media coverage of the visit highlighted adulatory military members under propaganda banners, reminiscent of the North Korean-style cult of personality. The publicized nature of the visit, along with his exhortations that the PLA Rocket Force had to “enhance strategic deterrence and real combat effectiveness” (“戰略提升威懾和實戰能力”), indicated that the purge of the Rocket Force was likely complete for the time being. However, there are still doubts as to the operational effectiveness and loyalty of the PLARF. (Image source: People’s Liberation Army Daily)
Russian Failures Lead to PLA Worries
Finally, the ultimate guarantor of the party’s security and foreign coercive strength is military power. The PLA’s budget continues to grow apace, but party leadership doubts in the readiness of the PLA to “fight and win” (能打仗、打勝仗) have only increased with time.
The Russia-Ukraine War has provided the PLA with a number of lessons, but also introduced significant doubts to the party leadership about the ability of the PLA to rapidly and decisively win a war. The Russian military not only heavily outnumbered the Ukrainian military, but also had superior technology—long-range strike, air assets, and space assets that the Ukrainians could only dream of. However, Russia could not effectively use these assets to produce a rapid victory; attempts to combine precision weapons and rapid maneuver in an imitation of the American way of war only produced embarrassing revelations of the poor Russian logistics enterprise, a risk-averse air force, catastrophic rocket failures, and an army incapable of basic maneuvers. Even after transitioning to the older, plodding doctrine of massed firepower and attrition, the Russians continue to lose men and material at far higher rates than their hastily-trained opponents on the defense.
With the operational problems of an invasion of Taiwan several orders of magnitudes more difficult, the doubts of the party leadership regarding the PLA—already replete with terms such as “Five Incapables” (五個不會), “Two Incompatibles” (兩個不相適應), “Two Big Gaps” (兩個差距很大) , and “Two Inabilities” (兩個能力不夠)—have been significantly magnified over the course of the war. There has been a recent cycle of re-structuring coupled with several rounds of purges across the entire force, particularly focused on logistics, production, and the PLA Rocket Force. The mirroring of the restructured/purged portions of the PLA to identified Russian weaknesses is unlikely to be accidental.
Implications for Taiwan
The last few years have exposed serious weaknesses for the PRC in its competition with the United States. Domestic economic and scientific weaknesses, coupled with the poor performance of the PRC’s “no-limits partner” in war, have likely resulted in less favorable calculations of comprehensive national power compared to previous years.
My earlier assessment of Taiwan’s security environment still holds, as the PRC economy continues to underperform against even the lowered growth targets established in March 2024. Given the increasingly obvious weaknesses of the PRC economic position, the incoming US administration will likely sharpen the competition, further occupying Beijing’s resources and attention.
None of this, however, makes Xi Jinping’s PRC less dangerous. In lieu of direct confrontation with the United States or an all-out invasion of Taiwan, Xi will likely respond by increasing gray zone coercion of Taiwan and other PRC neighbors. This gray zone coercion will likely seek to practice elements of deception, and to increase the ability of quasi-military entities such as the China Coast Guard to conduct military operations in its own right, or jointly with the PLA. Previous rounds of PRC coercion practiced the operational elements needed to enact a blockade; future coercion will likely try to normalize the employment of large forces to reduce the ability of defending forces to determine whether or not a crisis is at hand. Taiwan must prepare accordingly.
The main point: CCP assessments of the PRC’s comprehensive national power (CNP) likely indicate a continued, if not widening, gap compared to the United States, with competition likely to accelerate in the near future. In lieu of direct confrontation against the United States, Xi will likely escalate gray zone coercion against Taiwan.
