The formation of blocs is one of the most popular explanations for geopolitics. During the Cold War, this was almost self-evident, as there were two very clear camps, led by the Soviet Union and the USA. But even after the end of this era in the early 1990s, we still like to break down global developments into this binary view. The preferred pattern of recent years: autocracies versus democracies. Many derived from it the narrative that autocracies such as China were on the rise, while democracies such as the USA and the EU states were increasingly losing ground. In 2011, the US investment bank Goldman Sachs predicted that the Chinese economy would catch up with and eventually overtake that of the US by 2026, with the Asian state continuing to extend its lead.

However, these and comparable forecasts - from the OECD, for example - have proven to be wrong. Goldman Sachs itself corrected itself last year, with the bank now assuming that China would not catch up with the US until 2035 and that the two economies would then develop more in parallel. The London-based economic research company Capital Economics even came to the conclusion in a recent forecast that China will never catch up with the USA and will even fall behind again from the mid-2030s. International investors and even many Chinese are increasingly worried about the country's future. So were all the experts of the past wrong?

In fact, it is above all the top management that has changed. The fact that before Xi Jinping came to power, top politicians in China were trained in science and mathematics may have contributed to China's outstanding economic rise. Now, increasing the prosperity of the population is no longer the main goal of politics, but rather maintaining the Communist Party's power. This obviously requires politicians with different qualifications. As a result, we are seeing that fewer and fewer members of the Politburo have studied "hard sciences"; "soft sciences" now dominate.

These politicians have made some serious economic mistakes in recent years. The rigid corona policy was certainly the most conspicuous and its damage to the economy was clearly recognizable. But even after the 2008 financial crisis, the Chinese government relied on real estate investments to stimulate the economy. Although this approach brings short-term success, it almost always leads to a crisis in the long term - for example in East Germany in the 1990s or in the USA during the subprime crisis. There are now 65 million empty apartments in China that do not generate enough rental income to service the mortgage debt. Due to these gigantic bad investments, China is already more indebted than many rich industrialized countries, which means a particularly heavy burden on future growth at a much lower level of prosperity.

Things are unlikely to improve in the medium term. China is suffering from an unfavorable demographic development. Investment in modern technologies, which is crucial for the performance of an economy, is also nowhere near as high as is sometimes assumed. Let's take artificial intelligence (AI) as an example: according to the AI Index Report from Stanford University in the US, even the Europeans can keep up with China in terms of the number of newly developed AI systems. The USA has a clear lead. This is confirmed by the expenditure on AI systems in the USA, which at 47 billion US dollars is far ahead of all other countries surveyed. Spending per capita also shows that China is not investing or is unable to invest particularly heavily in AI. The downfall of the West is still a long time coming.