November 13, 2021: China is seen as a major military and economic threat to the rest of the world, and especially to its neighbors in East Asia. There is another important aspect of this threat that is less visible outside China. While the Chinese government backs the aggressive strategy, the Chinese people are not cooperating. The population is shrinking and the new middle-class of university grads see China as a military threat as anxiously as Chinese neighbors do. These internal problems impose restraints on this new Chinese aggression policy and the ability to use it. The population is shrinking because of the “one-child” population program of the 1980s. This was not lifted until recently when it became obvious that just eliminating the “one-child” rules did not increase the birth rate. The university grads that made the economic growth possible are disillusioned with how this worked out and the new Chinese army cannot attract enough well-educated recruits to support the new Chinese ambitions.

China’s explosive economic and military growth was the product of four decades of economic transformation, extraordinary economic growth, and modernization of all aspects of Chinese life. It started with a bold and seemingly desperate move; abandoning the principles the founder of Communist China, Mao Zedong, imposed. Mao defined the Chinese version of communism, which was different from the form popularized, and often imposed, by the Russians. Maoist communism stressed the rural population, not the urban workers, as the key revolutionaries and that radical change was required to achieve the socialist paradise. Maoism in practice proved disastrous and killed 20-30 million Chinese, mainly from starvation, when imposed during the 1950s. To deal with the negative response to that, Mao launched the Great Cultural Revolution in the early 1960s and while this phase only killed a few million it wrecked the economy and educational system. In the 1970s Mao died and those who sought to continue his work were killed or jailed. This led to a new leader, Deng Xiaoping who made some major changes to Chinese communism by instituting economic reforms during the 1970s and 80s that brought back a market economy while leaving the CCP (Chinese Communist Party) in power. This was a major innovation that modern communism defined as impossible. Deng also supported “collective leadership” with no more “leader for life”, to create and sustain more efficient government in general. Deng practiced what he preached, retired when his ten-year term ended in 1992 and died five years later died.

The Deng reforms lasted until 2016 when a new leader, Xi Jinping, decided that collective leadership was unsuitable for dealing with the problems the new affluence had created. Xi Jinping seeks to become and remain leader-for-life. To justify this lifetime tenure, he must significantly reduce the corruption and mismanagement that is so common within the CCP and the Chinese government in general. To make this work CCP leaders have, since Deng died, turned to nationalism and a buildup of conventional military power to support territorial expansion. If nothing else this is popular and could eventually mean getting Taiwan back while imposing Chinese rule on the South China Sea and grabbing a few other bits of territory. This only works if China does not trigger a major war. Xi Jinping convinced key members of the CCP to back him on this and that first became public in late 2016 when senior members of the CCP agreed to grant Xi Jinping a special powers and recognition that made him equal to communist China founder Mao Zedong. No other Chinese leader since Mao has had that kind of power.

While Mao has become popular with many Chinese, those who lived through the 1960s see Mao as a major failure. That is what led to acceptance by the CCP of the economic reforms that transformed China. Xi Jinping has, as expected, used this Mao-grade power to deal with the corruption that persists in the senior ranks of the government and military. To demonstrate that as soon as Xi was declared a Mao caliber leader the CCP Central Committee announced punishments for many senior party officials for corruption. Since then, there have been an unprecedented number of senior officials being accused of or punished for corruption. One thing these corrupt officials had in common that was not publicized was their opposition to Xi Jinping’s political plans and ambitions.

Deng opposed life tenure for government and military officials as well as any thought of trying democracy, despite the success of that in Taiwan, Singapore and throughout East Asia. The Chinese aristocracy was overthrown in 1911 by Chinese seeking to try democracy and that was seen as a failure. The Chinese Republic of 1912 was unable to survive decades of civil war and a Japanese invasion that was part of World War II. By 1948 China had another emperor, in the form of CCP leader Mao Zedong and a new aristocracy that is still trying to survive. Xi Jinping is following the traditional rules of Chinese politics that survived Mao’s efforts to destroy and being methodical and avoiding radical changes like the Great Leap Forward, the Cultural Revolution or democracy. Most Chinese admire and respect that.

Xi Jinping offered a solution that does not involve democracy but will succeed or fail on how effectively it imposed accountability and honesty on a CCP bureaucracy that is more concerned about getting rich any way they can. Xi Jinping, like Deng Xiaoping, is willing to tolerate some bad behavior if it produces a net benefit for China and its rulers. So far that has led to the prosecution of some ineptly corrupt officials, and at least encouraged local officials to do something about practices that lead to pollution, waste, and abuse of power.

Deng and Xi did not foresee another collection of problems; population decline and middle-class burnout. In a pattern like what other industrialized nations have already experienced, China not only has a labor shortage because of a low middle class birth rate, bur is now experiencing the side effects of too many university graduates. Currently about 54 percent of young (18-22) Chinese will obtain university degrees and a growing percentage of them cannot find jobs that justify the effort and expense that went into obtaining a diploma. In 2021 over nine million recent university graduates went looking for a job. That was four percent more than 2020 and most will not find a job that requires a university degree. Even grads with STEM (Science, Technology, Engineering, Math) degrees are not guaranteed a job and, even if they get an offer, it is often not well-paid and, in their field, as was the case a decade ago. Many must settle for low-level (high school) teaching jobs. The military is always seeking STEM grads but this is considered second-best because pay and benefits are not great and working conditions are often very unattractive, especially in the navy where ships spend more and more time at sea. Another problem with the military is that you must qualify to be an officer and that excludes many STEM grads who cannot meet the physical or gender (males preferred) requirements.

Over a decade ago it was noted that while China was getting rich, there was much corruption in the government, the military and even the universities. This created a growing number of unhappy Chinese, and they have a lot of unemployed, often because of corruption. Job seekers are cheated and exploited by corrupt employers and officials on a regular basis. These problems are especially painful for the half of new job seekers who have a university degree.

Difficulty for university grads getting a suitable job is nothing new. In the past, whenever there was an economic downturn, like in 2008, 30 percent of university students could not find a suitable job right away and taking anything caused problems later because to future employers that meant you were not a prime candidate right out of university.

Despite the tight censorship on Chinese Internet social media there is an increasing amount of chatter by recent university graduates about the need for change. Attempts to fix the core problem, corruption, are not working for most Chinese, especially new university grads and that is seen as menacing by Chinese in general. Historically Chinese dynasties usually fell because they were weakened and torn apart by rebels enraged by corruption. That's one reason why communists gained power in 1949. But their virtuous new government began to show signs of corruption within a decade, and it's gotten much worse since communist economic policies were dumped in the 1980s. What goes around, comes around, slowly and inexorably.

A decade ago, the annual number of university graduates rose from 1.4 million in 2002 to 3.4 million 2005 and 6.3 million in 2010. In 2002 only 15 percent of young Chinese were seeking a university degree and a decade later it was already a problem. Just passing the high school exam that qualified you for university entrance did not mean you got into the more prestigious schools. For parents who could afford it, or were willing to go into debt, getting into a foreign university was an expensive option. That meant improving the required foreign language skills and being away from home for a long time, especially if the graduate received better job offers overseas.

A decade ago, the military offered another solution. Back then the military wanted to upgrade their officer quality by requiring all new military officers to be university grads. A decade ago, only 5.7 percent of military personnel were university grads. While every Chinese male is technically subject to conscription, in practice the military depends on volunteers and recently potential recruits were allowed to apply on-line. The max age has been raised to 24 to make it easier for college graduates to join, usually for three years. The military provides more opportunities for university grads as in higher paid technical jobs and promotion of officer rank. On the downside, you could not make as much money as ambitious and able STEM grads could.

The armed forces devoted more resources to recruiting recent grads. This often worked, especially when the economy was unable to provide all grads with suitable jobs. The military presented itself as an opportunity, and an adventure as well. If nothing else, a new grad could spend a few years in the military, and with that resume enhancement, become a reserve (part time officer) and go find a good civilian job without a blemish on their resume. Having served as an officer gave young university grads a political edge in obtaining some very desirable jobs. The military was particularly eager to snag grads with technical (STEM) skills. This worked, but not as well as the military expected. The new officers with degrees were often there because the alternative was a factory job, as a worker and not a supervisor. Too many of these new officers left after their initial term of service and many were not interested in becoming a reserve officer.

Another option was to seek a job in the secret police. This is the MSS (Ministry of State Security) and it puts more emphasis on political reliability than higher education. Serving as an officer in the MSS is a great resume enhancer but mandatory service terms in the MSS are longer and entry requirements in general are more demanding than with the military. Pay is not great and the MSS is becoming less and less popular with most Chinese.

Periodic economic recessions were not the only problem new grads faced. There were local economic problems that are threatening the Chinese economy in the long term. These include problems with the banking system and a housing bubble. Both are corruption-related and have, for over a decade, been more than the government can handle. So far, the situation has been controlled, even if it’s at the expense of economic growth. That means more unemployment or underemployment, especially for recent university grads. Manufacturing and service industries see this as an opportunity by increasing the education levels of jobs that were once seen as not requiring a university education.

Despite the booming economy, it’s still hard for many college grads to get a job. That means not getting married or even trying to have children. A growing number of Chinese come out of a university already disillusioned and unwilling to make a major effort to change their situation. This was obvious a decade ago when the unemployment rate of university graduates was over 10 percent, compared to 4.1 percent for urban workers in general. The government does not see this as a problem because a high proportion of the population having a university degree provides a reserve of talent for future crises. The less optimistic, or more realistic, senior leaders see this surplus of university grads as the organizers of the next revolution. So do Chinese in general.