Xi’s China: dazzling technology, military muscle—and an economic mess

Subscribe to enjoy similar stories.More than a decade into Xi Jinping’s rule, China’s military has grown more formidable, its factories dominate global manufacturing and its technology pioneers are closing the gap with Silicon Valley.Yet big parts of its economy are a mess. A colossal property bust has destroyed trillions of dollars in wealth, consumer confidence has been gutted and the job market has grown bleak.The disconnect shows how Xi has made China’s security a priority over its economy.

He is steering hundreds of billions of dollars into pursuing self-sufficiency in artificial intelligence, semiconductors, electric cars and other strategic sectors, while holding back on economic reforms that would help create more jobs and lift the country’s middle class.It is all in service of his vision for “national rejuvenation” grounded in military might and industrial strength, a strategy likely to be on full display when President Trump travels to Beijing to meet Xi.In Xi’an, a city about 600 miles southwest of Beijing famed for its ancient terracotta warriors, the government last year slashed spending on maintaining roads and running courts, while increasing it by about 80% on science and technology. As city revenues shrank, spending on elementary and middle schools alike dropped by more than 10%, though local military forces received millions of dollars in special funding.In Foshan, near Hong Kong, residents said in interviews that a sense of crisis has descended over the once-booming manufacturing hub, where the economy grew by only 0.2% last year.

Officials want to transform the city into a center for robotics, but that industry is too small to save Foshan’s economy. Today, many factories are vacant, with for-rent