Insulate, Then Press

China’s economic difficulty is best understood as chronic structural decline rather than imminent collapse: a demand-deficient, deflation-prone, demographically contracting economy whose leadership recognizes the diagnosis but declines the rebalancing that would resolve it, because the required measures shift income and authority toward households. This diagnosis is now well established in the peak-China literature. Its policy implications are not.

This paper argues that because the decline is substantially endogenous, it cannot be triggered externally, and coercion aimed at rupture tends to consolidate the regime while imposing disproportionate cost on the initiator. It develops a single organizing contribution — a sequencing framework governed by an operationalized stability constraint. The framework holds that the United States must reduce its exposure to China’s one instrument of real, currently unhedged coercive force against it, critical-minerals processing, before applying most forms of pressure, with technology denial as an argued exception that races a faster-closing window. The paper confronts the two strongest objections to its decline premise — overcapacity as durable strategic strength, and the preventive-war risk of a pressured peaking power — and specifies indicators that would falsify the assessment.