Recent years have offered a hard lesson on the economics of authoritarianism. Often, authoritarian regimes have poor economies. This leads to compensating actions—often military adventurism. Authoritarianism, adversity, adventurism: these present an ominous warning about China.
The 21st century’s economic performance of authoritarian regimes demonstrates starkly poor economic performances. Using World Population Review’s measure in constant U.S. 2023 dollars, between 2010 and 2020, Russia’s GDP fell from $1.525 trillion to $1.493 trillion. From 2005 to 2020, Iran’s barely moved (from $226 billion to $240 billion). Syria’s plunged from $253 billion to $11 billion between 2010 and 2020, Venezuela’s has dropped off the charts entirely, ditto North Korea’s, and Cuba’s was a mere $107 billion in 2020.
The reason for such poor performance is not hard to discern. Authoritarian regimes’ overriding law is maintaining their hold on power. The result is diminished private sector investment, increasing attempts to move capital out of the country, and individuals’ hoarding of resources ahead of inevitable economic downturns.
Authoritarian regimes must compensate for their poor economic performances. In the case of smaller economies, they frequently seek to become clients of larger ones; North Korea and Syria became junior partners with the USSR/Russia. Larger authoritarian regimes seek to forcibly obtain what they cannot produce: Russia invaded Ukraine; Iran sought leverage through nuclear weapons.
In economic terms, authoritarian regimes attempt to engage in “rent-seeking” behavior: obtaining resources but without increasing the productivity necessary to economically produce them—an effort to obtain “something” (additional resources) for “nothing” (their diminishing economic output).
No authoritarian regime has pursued rent seeking better than North Korea. A moribund economy since the Soviet Union’s collapse, in the past it used the threat of obtaining nuclear weapons to wrest “aid” from other nations—including the U.S. from 1995-2008. Of course, North Korea eventually went ahead and obtained nuclear weapons. Now untouchable, it exports mercenaries and munitions to Russia. It was this same impunity that Iran sought with its attempt to develop nuclear weapons.
Authoritarian regimes’ incentive is clear: without such “rent,” they struggle. When their larger partners fail, the smaller authoritarian junior partners suffer accordingly: North Korea’s economy slid dramatically behind the historically less-developed South Korea, while Syria’s Assad was toppled entirely in 2024.
This brings us to China. China has had the most successful authoritarian economy for decades. It had seemingly beaten the authoritarian/adversity trap. Between 1990 and 2000, its GDP grew 235%, another 89% from 2000 to 2005, 170% from 2005 to 2010, and 81% from 2010 to 2015. By 2015, China’s GDP was just $7 trillion below America’s and seemed certain to catch and surpass it.
China appeared to have squared the circle of repressive regime and impressive growth by keeping a comparatively light hand on its economy. High growth was its reward.
However, things have changed. Since 2020, China’s growth has slowed markedly. According to Statistics Times, the 2025 U.S. GDP is projected to be over $11 trillion greater than China’s.
China’s economic underpinnings are worse than its recent performance. It has long been considered an unreliable trade partner, due to IP theft, restrictions on foreign businesses operating there, and more. COVID and the CCP’s draconian policies devastated it. Its property sector stands tenuously on inflated values. There is significant corruption. And it is rife with inefficient state-run enterprises. Finally, there is the risk of decoupling: no longer a globally low-cost producer, and subject to frequent trade disruptions, investment is slowing and shifting.
The decline in China’s economic growth has coincided with an increase in its belligerence. There are frequent clashes with its neighbors throughout the region. Its Belt and Road initiative aims at supplementing military might with economic resources. It increasingly partners only with other authoritarian pariahs: North Korea, Russia, and Iran. And there are unending threats against Taiwan.
Still with the world’s second-largest economy and a rapidly expanding military, China’s increasingly authoritarian government has a slowing economy. Perhaps it also fears that its greatest growth is behind it. If so, could China join the descent of other authoritarian regimes?
Authoritarianism-adversity-adventurism: nowhere is this progression more dangerous than in today’s case of China.
