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There are a lot of reasons to find the latest confrontation between the United States and China over Taiwan to be really scary. Anytime two countries with nuclear weapons face off it’s scary. Any time any country’s political leaders (in Beijing or Washington) decide it’s time to test an adversary, it’s scary. Any time two countries with unresolved long-term tensions face a short-term crisis, it’s scary.

But let me take a step back from the headlines to look under the hood of this crisis at one of the reasons that China has decided to rattle the saber so intensely at this particular time.

Sure, there’s the argument that China sees the United States and its allies “distracted” by the war in Ukraine. Sure, there’s the political situation in both countries that gives politicians a motive to push a confrontation. (Many China watchers think that to the extent Chinese President Xi Jinping faces any domestic challenge it comes from even more hard-line rightwing, xenophobic leaders of the Communist Party. The Biden administration is under pressure not to be “weak” on China.)

But what intrigues me about this crisis is what it suggests about the state of China’s economy. I can’t help thinking that a confrontation with foreign enemies is the precise strategy followed by so many regimes that see themselves in trouble on the domestic front.

And right now Xi and the rest of the party’s leaders find themselves staring at an economy that is in terrible shape. Short-term and long.

China’s GDP contracted in the second quarter. The International Monetary Fund expects growth this year overall to be just 3.3%. And it could well be lower. Even 3.3% is way below the 5% or so that’s the unofficial growth target for 2022.

The real estate sector continues its collapse. Thousands of Chinese recently went on a mortgage strike, refusing to pay their mortgages until real estate developers delivered on their promises.

And demographic trends look to have bitten China hard in a most uncomfortable place. The latest data from China’s National Bureau of Statistics put youth (ages 16 to 24) unemployment at a shocking 19.3% in June. This has led to a national epidemic of “tang ping”—-lying flat-—as young Chinese opt out of the economic rat race.

And China’s economic slowdown comes as the country continues to age. So not enough jobs for the young and not enough in retirement pensions or savings for the old.

The ideological campaigns of the Xi years have always felt like they were designed to divert attention from China’s domestic problems from a slowing economy to a severely damaged ecosystem. It would be surprising if those “facts” didn’t play a big role in the current crisis. (I don’t mean to overlook the likelihood that the Biden administration has its own political and economic agenda playing out in this crisis.)

Which, of course, doesn’t make the current crisis any less scary. It might even make it more frightening.