The “Struggle Mentality” Is Hurting China’s Economy

By Peter  Lee

Over the past four decades of reform and opening-up, China’s economy rose at an astonishing pace and created what many called an economic miracle. Yet in recent years, its sharp downturn has coincided with the revival of a familiar theme in Chinese politics — the “struggle mentality.”

At first, this spirit of struggle was applied to the domestic anti-corruption campaign. It achieved remarkable results and won broad public support. The problem began when the same mindset was extended to foreign relations and economic diplomacy — where the results have been disastrous, dragging the economy into a period of decline.

1. Fighting on All Fronts Means Losing Strategic Initiative

Any major power facing a complex international environment must act with strategy and restraint. Even when confrontation is inevitable, it must be selective and tactical.

Yet China today finds itself clashing simultaneously with the three most influential economies in the world:

a trade war, technology war, currency war, and rare-earth war with the United States;

fundamental differences with Europe over the Russia–Ukraine conflict;

and growing tensions with Japan.

This “three-front struggle” is reminiscent of the late Qing dynasty, when the Empress Dowager Cixi chose to confront multiple foreign powers at once — and ended up cornered. The pattern is strikingly similar: without prioritization or balance, “fighting everyone at the same time” inevitably leads to failure, shrinking China’s strategic space and accelerating the outflow of trade, investment, and industrial supply chains.

2. A Struggle Without Moral Ground Cannot Succeed

History has repeatedly shown that lasting victories come only when one stands on the side of moral legitimacy. China’s triumph in the War of Resistance against Japan was rooted in justice and popular support.

But on major international issues — from Ukraine to Yemen to Hamas — China’s positions have often run counter to the global mainstream. Its declaration of a “no-limits partnership” with Russia undermined its image as a neutral power and increased suspicion among Western and neighboring countries alike.

In global politics, moral standing and national interests are intertwined. A struggle without moral credibility will ultimately lose friends — and markets.

3. Ignoring Domestic Resilience Is a Costly Mistake

External confrontations always carry internal costs.

Today, tens of millions of college graduates in China face job shortages, while export-oriented companies struggle with dwindling orders. The stock, housing, and bond markets all hinge on improved relations with the West.

Tensions with the U.S., Europe, and Japan have reduced investment, orders, and technology exchange — directly undermining employment and private wealth. Simply put, China’s relationship with the Western world is the foundation of its economy.

4. Returning to Rationality and Reopening to the World

Forty years ago, China emerged from isolation through reform and openness, earning both prosperity and respect.

Now, amid a turbulent global landscape, China needs pragmatism and cooperation — not ideological struggle.

Only by restoring openness, rebuilding trust with the U.S., Europe, and Japan, and engaging constructively with the world can China revive confidence in its stock, housing, and job markets, and place its economy back on a path of sustainable growth.

Conclusion:

Struggle is not a development strategy — openness is.

China rose through openness over the past four decades; it must rely on openness again to secure its future.