The Chinese juggernaut is expected to overtake the American eagle by 2021 in terms of GDP, according to The Economist’s latest estimates (Aug 2014). In fact, China already outpaced the U.S. as the world’s largest manufacturing power in 2010. Since then, it has been further widening its lead, according to the 2013 UN research. Notwithstanding a small dent in its recent growth trend line, partly owing to a slowdown in export demand from key markets (e.g. U.S. and EU), China has been able to achieve its growth target of 7.5% in the second quarter of 2014. Yet a fleet of naysayers still do not believe these numbers indicate an upcoming shift in the world’s power distribution and, in the face of cognitive dissonance, cling to a weakly-grounded belief that United States of America continues to be the one and only hegemon at least until they rest in peace. Stiff opposition to an impending appearance of Chinese hegemony is predicated on two assumptions. The first one is that China cannot sustain its astonishing growth and is soon doomed to fall from its grace. The other is that even if China is able to surpass the U.S. in the economic area, the U.S. will still be dominant in other areas (e.g. military, culture and diplomacy).

Will China soon hit a hard landing and put an end to its three decades of remarkable economic prosperity? There are those who have been saying so for years. Their concerns are flavored with you-name-it factors (e.g. spiraling inflation, mounting debt burdens, widening income inequality, rampant corruption, lack of political legitimacy). However, the Chinese leadership has been taking these concerns about economy-destabilizing elements very seriously and has been responding to each one with certain measures. For instance, after experiencing extremely high inflation as a by-product of relentless economic growth (e.g. about 20% in 1988 and more than 25% in 1994), Chinese leaders have been making every effort to avert double-digit inflation, and their efforts have come to fruition, with an average inflation of over 3% in the past decade according to China’s official figures. Witnessing Western asset bubbles leading to financial crisis, some harped on China’s looming debt problem, exacerbated by local governments’ reckless spending. The Economist, however, recently (July 2014) concluded that China’s debt-to-GDP ratio of 200% is far from confronting a debt crisis, considering that Euro crisis countries had far higher debts (e.g. more than 400% for Ireland). Grasping the gravity of problems related to inequality and corruption, China’s cabinet, under President Xi’s leadership, has also implemented a series of plans to combat these problems, resulting in Mr. Xi’s skyrocketing popularity and solidification of his political legitimacy. One thing to note is that none of these concerns have yet been able to snuff out China’s ferocious economic flame.

In spite of the aforementioned concerns which may destabilize macroeconomic conditions, a country’s annual production growth is driven primarily by three important factors: capital, labor and innovation. There are not many squabbles over China’s capital deepening which heightens its labor productivity and ramps up innovative capabilities. Yet some raise a dissenting voice over China’s sustaining a competitive advantage in manufacturing, taking into account its aging population and increasing wages. The Chinese government recognizes the long-term ramifications of demographic change and has been undertaking a suite of policies that aim to mitigate these impacts. President Xi, for instance, relaxed the one-child policy to halt a decline in China’s birth rate. It must be noted that an upsurge in elderly populations and wages is not necessarily a detriment to China’s economic growth. Aged workers are likely to be more skilled than the young, which can be manifested in the form of higher labor productivity. More importantly, China has been attempting to wean itself off an overreliance on investment in construction and manufacture-based exports in order to gradually transform its economy into a consumption-driven one. In such a case, a rise in real wages, in fact, helps fuel domestic consumption.

Deficiency of innovation is also an oft-cited pretext for China skeptics to scoff at China’s sustainable growth. People like Adam Segal firmly believe that America’s Schumpeterian approach will unceasingly fare better at leading quality innovation than China’s knock-offs-churning-out model, brushing aside troubling evidence of China’s staggering numbers of scientific papers and patents. (Check Segal’s book Advantage: How American Innovation Can Overcome the Asian Challenge.) Yet Dan Breznitz and Michael Murphree warn about a parochial view of innovation as the invention of breakthrough products. In their eyes, China is extremely competitive at other types of innovation (e.g. process and product innovation), which yield bigger rewards for an emerging country. (See Breznitz and Murphree’s book, Run of the Red Queen.) Moreover, numbers on innovation momentums are tilted in favor of China. Whereas the U.S.’ has stagnated over the last decade, China’s R&D expenditure as a percentage of GDP has constantly been on the rise, estimated to forge ahead of that of the U.S. in less than 10 years (Battlelle’s 2014 Global R&D Funding Forecast). There is little need to reiterate a spew of Chinese innovative firms’ in-search-of-excellence sages (e.g. Huawei, Lenovo, Haier, Xiaomi, Baidu), which have been already extensively covered by the Western media. Alibaba, which had the largest ever IPO, and whose corporate value now tops Facebook, IBM and Samsung, is a signpost hinting that the awakened Chinese dragon is already shaking the world.

Even if we accept that the Chinese economy will leapfrog the U.S.’ one day, does it necessarily mean that America will lose its dominance in other areas (e.g. military, culture and diplomacy)? Some international relations (IR) scholars, such as David Shambaugh, strongly believe that American hegemony will continue. (Check Shambaugh’s book China Goes Global.) To unravel his arguments, he raises the wrong question, “Is China [currently] influencing the actions of others and the trajectory of international affairs in various domains?” The right one should be, “Has China’s influence over the actions of others become larger than before, and will it become greater in the future?” Furthermore, it is a mistaken belief that the Chinese leadership has strong intentions of influencing international affairs in various domains in the first place. As backed by much of Chinese literature, China’s primary policy goals are economic prosperity and domestic stability, which is highly likely to remain the case. Besides, Shambaugh’s methodological approach is grounded on a naïve presupposition that military, cultural, diplomatic capability each carries similar weight with an economic one, and these power resources are not fungiblewith one another.

A.F.K. Organski, the IR guru that developed Power Transition Theory, clarifies three elements of power that are key to the transition of dominant power—that is, economic growth, population, and political capacity. The first two variables favor China writ large. The only thing left for America is political capacity. Your correspondent does not want to deterministically conclude that America will lose its battle even on the dimension of political capacity. Yet influenced by penetrating insights from Marx and Bourdieu, this writer views economic capital as a prime power source that changes dynamics in this stratified world. Looking through his economically-polarized lens, time is on China’s side.

China’s fundamentals may not be as strong as you’ve been told.

Place your bets, ladies and gentlemen. The fix is in: China will be the next superpower.

We’ve been told the economic projections all assure it, but do they? The same projections were made for the Eastern bloc in the 1960s, Japan in the 1980s, and the Asian Tigers in the 1990s. In each of those decades the conventional wisdom, particularly in the United States, whipped policymakers into a frenzy over the implications of dizzying growth numbers. And yet to varying degrees, history has proven the conventional wisdom wrong. Just as history has a tendency to repeat itself, there is strong evidence to suggest it may be wrong on China as well.

First, let’s examine economic strength, upon which most “China superpower” predictions are predicated. One of the most oft-cited figures is China’s GDP. In 2013 China met its target to expand by 7.5% – more than double that of the United States, but also only slightly more than half the 14.2% it recorded only 6 years earlier. And how do these numbers stand up qualitatively? Even as GDP has plummeted, it is increasingly being funded by credit accumulation, with the credit intensity of growth now triple what it was eight years ago. Of course, the rapid expansion of debt is concerning but not necessarily game-changing. Much more alarming is the housing market bubble. Of China’s 27 largest cities, 21 have unused housing inventory that exceeds 12-month demand, and housing costs in Shanghai have increased 273% in the past seven years. According to a recent assessment published by analysts at Japan-based Nomura bank, “It is no longer a question of ‘if’ but rather ‘how severe’ the property market correction will be.” As much as 20% of China’s GDP is derived from property investment, and a sizable chunk of China’s wealth is held in real estate equity. The implications mirror the U.S. property crash of 2008, but are magnified by the fact that China has more than 10 times as much spare housing inventory. When this bubble bursts, it will be very painful.

These numbers aren’t surprising. In 1994, Paul Krugman described the “myth” of the Asian Miracle as “perspiration rather than inspiration.” He compared Asia’s high growth levels to historical examples in which the short-term mobilization of new labor and capital generated remarkable growth. As those economies matured and new inputs became scarce, GDP growth took a corresponding dive. The parallels with China are remarkable. Labor costs are rising rapidly, debt is soaring, and urbanization projects are becoming increasingly desperate. Unless China can successfully transition its economy away from manufacturing towards consumption and innovation, it is destined for a significant cooldown.

But there is more to China’s fragility than just economics. To the extent that “demographics is destiny,” China’s demographic future looks rocky. 35 years of the one child policy has sent the birth rate plummeting to well below replacement levels, which means the population of 1.3 billion will actually begin to shrink and age during our lifetimes. The implications of this are profound: the elderly dependency ratio is rising at an unprecedented rate, the working age population is beginning to dry up; and due to a cultural preference for sons, the gender gap is expected to reach up to 35 million extra men by 2020. To use the common phrasing, China will get old before it gets rich. The social and welfare burdens these trends foretell are alarming, and unlike economic growth predictions, demographics are an absolute certainty.

The confluence of a cooling economy and a demographic nightmare may be too much for the historically deliberate and risk-averse CCP to bear all at once. Premier Li Keqiang has identified 7.2% growth as the minimum level needed for China to provide jobs to the 10 million new workers who enter the labor force every year. With expectations for 2015 set at 7.3%, (a decline of 0.2% year over year) we are very quickly approaching the breaking point. Chinese performance legitimacy, the idea that the CCP will maintain its support as long as it performs well, will begin to evaporate, as unemployed male youths grow dissatisfied with emerging social and economic trends. They are being raised in an unequal society where it’s becoming more and more difficult to find either a job or a partner. It follows as no surprise that since 2011 the CCP has been spending more on domestic security ($125b in 2013) than the military ($120b in 2013.) Since the Tiananmen protests 25 years ago, social unrest has exploded by a factor of 20 to more than 180,000 incidents per year. These are no real threat to CCP control, but instability further impacts economic fundamentals, and it appears things will get worse before they get better.

Finally, when assessing China’s viability as a superpower, we must evaluate what being a superpower entails. China’s strength is one-dimensional, drawn from its economy. But there are dozens more areas in which it still comes up short: leadership, military power, soft power, diplomacy, domestic stability, entrepreneurship, innovation, transparency, corruption, pollution… the list goes on. (For further reading on this, see David Shambaugh’s excellent Brookings piece entitled, “The Illusion of Chinese Power”). Yet the CCP has shown little interest in undertaking the systemic reforms necessary to adapt and really meet these challenges, preferring a more incremental pace that is simply too slow.

Even more significant is the question of whether Beijing has any interest in being a superpower in the first place. The government has repeatedly abstained from taking stands on issues of regional and global stability. In the South China Sea they’ve taken the opposite tack and begun unilaterally taking control of disputed islands and territories. In Hong Kong this year, we have learned what Beijing’s vision of a free election looks like. Additionally, China follows its own interpretation of many global norms such as non-refoulement, universal human rights, and R2P. China has massively reaped the benefits of the post-WWII liberal order while wholeheartedly rejecting the responsibilities expected of its leaders.

Predicting the future is difficult, and China may yet continue to beat the odds. But prudence demands we consider the risks we take by tying our economic and political futures to the mirage of the Chinese GDP machine. This author is not anti-China. Indeed, the world does much better with a strong and stable China. But there is real cause for concern when it comes to China’s economic strength and leadership, and this is very bad news for all of us. If I were a betting man, I’d probably sit this round out.