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China could be outpacing the US and Europe in the race to realize fusion, a potentially clean energy source that has attracted massive investment in recent years. According to the Wall Street Journal, Chinese crews work 24 hours a day on fusion projects in a massive, new tech campus. China is also home to 10 times as many fusion scientists and engineers as in the US. At their current rate of experimentation, research and designing, the Chinese fusion experts will surpass Western expertise and accomplishments in a few years.

This news appeared while the New York Times reported that Chinese President Xi Jinping was welcoming Hungarian Prime Minister Viktor Orbán to the capital of Beijing for previously unannounced talks on finding a resolution to the war in Ukraine. Russia is a Chinese ally and arguably Hungary’s closest friend, while Hungary is also a member of NATO and the European Union.

Both developments herald China’s strong influence on the world order. Domestically, however, many warning lights are flashing for the future of what is now the second-most populous country after India.

The Chinese economy in particular faces significant headwinds after a slowdown following the shutdowns of the coronavirus pandemic, a drop in capital and credit after a boom in lending, and the bankruptcies of major real estate firms. Banks are collapsing, reported the Economist. Lay-offs are on the rise, added the South China Morning Post, as youth unemployment is sky-high. Capital flight, or people removing their money from the country, is accelerating, the Brookings Institution found.

The economy was the big topic at the recent third plenary session of the 20th Central Committee that ended July 15, wrote World Politics Review. Xi’s solutions to the country’s problems, meanwhile, are “statist,” with spending on science and other matters of state security while making local governments more responsible for their economic planning – even though they are among the most irresponsibly indebted entities in the country.

Meanwhile, the future could be tougher.

Geopolitical observers like Peter Zeihan have long warned that China faces a demographic cliff, where the population plummets when today’s older generations pass on and younger families are producing one or no children. Another looming problem is the absence of any successor to Xi, Zeihan explained on his YouTube channel, suggesting that China might undergo a collapse of central government power when the 71-year-old president leaves the scene.

The Communist Party of China promises economic growth in exchange for obeisance to the state. The engine of prosperity is stalling. The all-important government appears rigid.

As the Atlantic Council wrote, “One might expect the government to put everything it has into plans to pull the country out of the economic doldrums … but instead of focusing on China’s current problems … it will prepare China for a confrontation with the United States by building industries powered by massive investments in cutting-edge technologies. This program is aimed at reinforcing the party’s hold on Chinese society”.

Notably, it added: “It will also underline China’s shift away from its longtime economic strategy of growth for growth’s sake.”