Thank you, Mr. Chair.
Thank you to our witnesses for appearing.
I want to ask a counterintuitive question and get both of your reactions.
The narrative over the last two decades has been the ascendancy of the PRC and the relative decline of the United States. However, what if we are entering an era where the opposite is happening?
This past year, China's population dropped by 2.1 million people, and we know demographic decline is impossible to reverse. We've seen this in country after country. When you enter into that kind of population decline—particularly in a country like the PRC, which is not open to newcomers and is somewhat xenophobic in terms of its racial composition—that decline is almost impossible to reverse. In seven short years, the population will be down by 1% and in 15 years by 2%. That's a pretty difficult demographic wave to counter economically.
In addition to that, according to the World Bank, U.S. GDP per capita was $76,000 this past year. In the PRC, it was $12,720. On those relative two bases, the U.S. economy in the last year grew at a breakneck pace off that much higher base. According to the recent data I've seen, on a nominal basis, U.S. GDP grew last year by 6.3% and China's nominal GDP grew by 4.6%. Youth unemployment is skyrocketing. It is now higher than it is in southern Europe—breaking through 20%, I believe. In fact, it was so high that, last August, officials in Beijing said they were no longer going to publish the data on youth unemployment.
When we put all that together.... Perhaps we are entering an era where the PRC is economically declining, which may result in domestic instability. In that context, what should western countries' position be relative to the PRC? We've been in something of a defensive position for the better part of a decade because of the increasing threats. We may be facing a China that is inwardly focused, as it was in the fifties, sixties and seventies, and vulnerable to domestic instability.
What should our position be relative to that, if that's the era we're about to embark on?