The following is an excerpt from Evan Medeiros' article in Foreign Affairs. Evan is a Senior Fellow on Foreign Policy at the Asia Society Policy Institute's (ASPI) Center for China Analysis (CCA).

Ever since Chinese President Xi Jinping secured his third term in power in the fall of 2022, he has had a rough time. Shortly after his reappointment, street protests pushed him to abruptly abandon his signature “zero COVID” policy. After a quick reopening bump in early 2023, the economy has progressively slowed, revealing both cyclical and structural challenges. Investors are leaving in droves, with foreign direct investment and portfolio flows reaching record lows. Meanwhile, Xi has fired his handpicked ministers for defense and foreign affairs in the wake of allegations of corruption and worse. His military bungled its balloon intelligence-collection program, precipitating an unwanted crisis after a stray balloon floated over the continental United States for days in early 2023. And now Xi is conducting a historic purge of military and defense industry personnel linked to China’s missile forces. Amid all this, the United States has continued to expand its alliances with China’s neighbors and countries outside the region.

These and other events have fueled the claim that China is stagnating, if not in permanent decline. Some scholars now argue that the world is witnessing “peak China” and that the country’s accelerating decline may lead it to lash out. “Welcome to the age of ‘peak China,’” wrote the political scientists Hal Brands and Michael Beckley in Foreign Affairs in 2021. “China is tracing an arc that often ends in tragedy: a dizzying rise followed by the specter of a hard fall.” Commentators, including the author and investor Ruchir Sharma, have begun to speculate about a “post-China world.” Even U.S. President Joe Biden got in the game, stating in August 2023 that China is a “ticking time bomb” that “doesn’t have the same capacity that it had before.”

These views are both ill advised and premature. Xi still believes China is rising, and he is acting accordingly. He is committed to achieving the “China Dream,” his longtime slogan for national rejuvenation. He intends to reach this goal by 2049, the 100th anniversary of the founding of the People’s Republic of China. If China is peaking, there is little evidence that Xi sees it. In fact, many Chinese elites, including Xi, believe it is the United States that is in terminal decline. For them, even if China is slowing down, the power gap between the countries is still narrowing in China’s favor.

If Xi did have concerns, he is unlikely to share them internally out of fear that doing so would generate criticism or even opposition. His ambitions are so central to his legitimacy and to the credibility of the Chinese Communist Party (CCP) that there is little space or incentive to walk them back. Xi is hardly oblivious to China’s recent problems. But as a committed Marxist-Leninist, he sees his country’s rise not as a linear process but as one that will take time and require adjustments. In his view, the country’s current difficulties are mere bumps along the road to achieving the China Dream.

Xi also believes that China’s path to greatness will differ from those of the Western powers, especially the United States. He believes in a strong role for the state, limited and controlled use of the market and the private sector, and the centrality of technology that can drive productivity gains. He wants an economy that looks more like that of Germany, an advanced manufacturing powerhouse, than that of the United States, which relies heavily on consumption and services.

Xi’s approach could work if he harnesses the right blend of state power and market forces, remains sufficiently open to global capital and technology, and embraces policies that address some of China’s biggest domestic problems, such as its declining and aging population. Xi’s recent actions, however, do not inspire confidence in his ability or willingness to take these and other steps to avoid a stagnating economy. But if there is one lesson to be taken from the past 40 years, it is that the CCP and its management of the economy can often muddle through against the odds.

Moreover, the concept of peak China makes little sense in today’s interconnected world, where states possess diverse sources of power and myriad ways to leverage them. Is Chinese power waning if its economy underperforms but its military modernizes and its diplomacy generates influence? China peaking economically is not the same as China peaking geopolitically — a distinction lost on many advocates of the peak China argument.

And even if China has reached some undefined upper limit of its power, influence, or economic growth, Chinese and American leaders probably would not realize it until years later. In the meantime, Beijing could still pose numerous problems for Washington and its friends and allies. And if it turns out that China’s power is in decline, it can still use its substantial capabilities to undermine U.S. interests and values in Asia and all over the world. So regardless of whether the label is accurate, for Washington to adopt a belief in peak China — and base its policymaking on it — would be unwise and even dangerous.

Read the full article in Foreign Affairs.