CHICAGO—For most of the past four decades, China’s direction of travel was clear: everything was moving forward. The country’s per capita GDP was barely $300 at the start of the 1990s. But its cities would soon fill with skyscrapers, highways, and subways. Families that once worried about having enough food would buy apartments, cars, and smartphones. Children would go to universities their parents could scarcely have imagined attending. In the space of a generation, China joined the World Trade Organization, hosted the Olympics, built the world’s largest high-speed rail network, and became a central engine of the global economy.
Rapid economic growth not only raised incomes but also transformed China’s sense of itself and its place in history. After what the Chinese call the “century of humiliation“—a period of foreign domination, from the Opium Wars of the mid-1800s to the Japanese invasion in the 1930s—China had gone from being one of the world’s leading civilizations to fighting for its survival. But the “economic miracle” of recent decades held out the promise of national restoration.
The change in mood was palpable. Chinese people could increasingly look at Americans, Europeans, and the Japanese not as inhabitants of a richer world, but as peers. The question shifted from whether China would catch up to when it would become the world’s leading economy.
But the mood in China has shifted once again. China is undeniably an enormous economy, a manufacturing superpower, and a formidable technological competitor. But something has changed psychologically. The expectation of automatic improvement has withered away. Growth has slowed, and a property boom that had made many households feel wealthier has faltered. Jobs for university graduates are becoming harder to find; marriage and childbirth are being postponed or abandoned; and the severe COVID-19 lockdowns, followed by their abrupt abandonment, weakened confidence (especially among younger urban residents) in the country’s leadership.
For the parents of younger Chinese, hard work coincided with an extraordinary economic transformation. But for young people today, there is good reason to fear that even extraordinary efforts may not yield an ordinary life. Outcomes often fall painfully short of the expectations that younger Chinese were raised to hold.
China is not alone in this. Between 1947 and 1969, real (inflation-adjusted) median family income in the United States nearly doubled. For millions of families, the experience of adulthood was one of steadily improving living standards: better jobs, higher wages, and a reasonable expectation that their children would enjoy the same or better opportunities. America had won World War II, built the world’s dominant economy, put a man on the moon, and emerged as the leader of the free world.
But this story began to fray in the 1970s. Incomes stagnated and unemployment jumped to 8.5% in 1975, leaving nearly eight million Americans out of work. Oil shocks, inflation, and repeated recessions created a sense that the extraordinary postwar economic machine was no longer working as it once had, and the Vietnam War and then Watergate eroded Americans’ trust in the establishment.
The change in national psychology was dramatic. In 1964, 77% of Americans said they trusted the federal government to do the right thing always or most of the time. A mere decade later, that figure had fallen to 36%, and by the end of the 1970s, it was around 25%. America was still extraordinarily rich and powerful, but the feeling of a continual ascent was gone. In 1979, US President Jimmy Carter famously diagnosed the country as suffering from a “crisis of confidence.” Americans had lost the faith.
Despite profound differences in political institutions and history, a period of sustained economic success taught Americans and Chinese alike that rapid growth was inevitable, leaving their children to learn the hard way that it was not.
The question facing China today is what happens when progress becomes slower, more uneven, and less transformative. Can a society accustomed to extraordinary growth adjust to more ordinary rates of economic progress? America’s experience suggests that such transitions can leave a lasting psychological mark, with less confidence in institutions, less faith that every generation will fare better than the last, and less belief in the power of individual effort to produce social mobility.
Roughly three-quarters of Americans now believe that young people today will grow up financially worse off than their parents. In 2014, 38% said hard work and determination were no guarantee of success, up from 28% a decade earlier. And in 2026, 50% of Americans said the American Dream—the idea that hard work enables people to get ahead—no longer holds true.
Economic success is not only material in nature. It also gives people a sense of hope and direction. Of course, China and the US are very different societies, and Americans were far richer when their postwar ascent began to falter. But both countries are dealing with versions of the same problem: coping with the end of the extraordinary.
Whereas Americans have spent decades wrestling with the psychology of interrupted ascent, China is only beginning to awaken to its new reality. While most societies can accommodate slower growth, a widespread belief that striving no longer matters poses a much greater challenge.
Copyright: Project Syndicate, 2026.
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