China's 10-Year Power Shift: Economists See a Dilemma Between Slowing Growth and a Taiwan Invasion Push

Oct 28, 2026

China's economic clout has faded over the past decade even as its military buildup aimed at Taiwan has grown fast, putting Beijing in a bind between a weakening economy and the costs of preparing for an invasion — a mixed picture for Taiwan, bad for China's economic leverage, but still a serious risk for regional security.

  • Taiwanese investment flowing into China has collapsed from roughly 65-70% a decade ago to under 3% now, a sign China's economy no longer scares or attracts Taiwanese businesses the way it did when Chinese investors once tried to pressure Taiwan's tech giants like TSMC and MediaTek.
  • China's growth has steadily slowed under Xi Jinping, falling from around 7% to the 4.5-5% range recently, with more declines expected — meaning China is less able to use economic size as leverage over Taiwan and the region.
  • China's military has grown dramatically more capable in a decade, going from one aircraft carrier and no invasion-ready amphibious ships to three carriers and four amphibious assault ships, plus a fast expansion of long-range missiles and nuclear warheads.
  • Despite that buildup, analysts say China faces a core strategic dilemma: invading Taiwan requires first controlling the Western Pacific, but controlling the Western Pacific requires first taking Taiwan — a chicken-and-egg problem made harder by weak logistics support and the need to keep Japan neutral.

Outlook: China is expected to keep building military strength aimed at Taiwan even as its economy keeps slowing, but the logistics and regional-containment problems mean an invasion remains a difficult and unresolved challenge rather than an imminent one.

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