by Gary Alexander
May 19, 2026
The press is awash with differing views of the results of last week’s Beijing summit between President Trump, with his business-oriented entourage, and China’s Xi Jinping, who seemed welcoming – except on his hot button called Taiwan. In the end, the language seemed stilted, as Xi and Trump agreed to build a “constructive China-U.S. relationship of strategic stability,” with Xi saying China’s door is “opening up and will only open wider.” They also seemed to agree on current Iran War strategies, and China expressed interest in buying more U.S. oil to wean itself from its over-reliance on Middle Eastern crude-oil.
This all reminded me of our own businessman’s tour of the emerging China colossus in May of 1996:
When our China tour concluded 30-years ago this weekend, on May 16, 1996, our 32 U.S. investors were treated to a farewell dinner at Shanghai’s Jinjiang Hotel – the same hotel where Chinese Premier Zhou Enlai and President Nixon signed their historic Shanghai Communique in February 1972, opening China.
The next morning, Friday, May 17, we awoke to a CNN news story about average Chinese noting the previous day being the 30th anniversary of the start of China’s Cultural Revolution, which began with the “May 16th Directive” that year – a diabolical second-murderous social experiment by Mao Tsetung, after his “Great Leap Forward” of 1959, which led to the starvation of over 30-million Chinese by 1962.
All over China, survivors of the labor camps during the decade-long Cultural Revolution (1966-1976) met in reunions to recall the privations they shared in that decade, yet our group seldom heard any survivors claiming some sort of reparations for these grievous wrongs. In fact, Chinese in their 40s then felt bonded by their shared suffering. At the time, I wrote, “These Chinese, now in their 40s, may be the largest group ever put into a position to change a country for the better…. Since these Chinese were forced to endure the worst their nation had to offer, in poverty and deprivation, they will surely never let it happen again.”
Our China guide, Keren Su, was typical of these Chinese Baby Boomers. Born in 1951, less than two years after Mao’s October (1949) Revolution, Keren Su survived the 1959-62 starvation only to be thrust into slave labor in his teens. On May 16, 1966 (when he was 14, almost 15), the May 16th Directive called for the arrest of the “intelligentsia.” His parents were teacher-scholars, so they were arrested and jailed. His father spent seven-years in jail, and his mother was sent to a re-education camp far away from home.
Keren Su was barred from serving in the teen-dominated Red Guards because of his family’s education, so he was sentenced to a labor camp in Harbin, in the far north of China, where he suffered bitter winters (averaging 10-degrees Fahrenheit) without heat. He suffered a lifetime of pains from those years. Yet he emerged with a positive spirit, seeking fame (and escape) by bicycling around China and taking pictures. Today, he leads tours and shoots gorgeous photography around the globe for China Span, based in Seattle.
A stunning “Mandate of Heaven” in 1976 led to the end of the Cultural Revolution. First, Chou Enlai died in January, and Mao died in September of that year. In between, Heaven spoke loudly: On March 8, 1976, the largest meteorite shower ever recorded fell on Jirin Province in Northeast China. In July and August, three-earthquakes hit Northern China, destroying parts of Beijing, and the industrial center of Tangshan, killing 665,000 and injuring 775,000. After Mao died, the “Gang of Four” (including Mao’s widow) tried to take over but failed due to outrage over the Cultural Revolution, largely launched by the evil Mrs. Mao.
By late 1978, Deng Xiaoping emerged as the next leader. He was a champion of local capitalism under central Communist control, beginning with privatized farms and Special Economic Zones, and the result of that gradual change created the greatest economic growth and escape from poverty in world history.
History’s Cycles – Civil War, to Industrial Revolution, Dominance and Decline
If I may generalize somewhat, the 20th Century’s most powerful economies emerged from a major Civil War, then recovered with an Industrial Revolution, creating a strong economy, which peaked – or fell.
• Great Britain’s Civil War was with the American colonies in 1775-83, followed by the world’s first Industrial Revolution in British factories, leading to their dominance in the 19th Century.
• America’s Civil War (1861-65) caused a devastating loss of life and destruction of our southern economy, followed by a Northern Industrial Revolution and dominance in the 20th Century
• Germany’s emergence from a gaggle of city states into a new nation in 1871 led to their own Industrial Revolution in heavy metal and armaments, leading to two devastating World Wars.*
• Russia’s Civil War between the Red Bolsheviks and White Russians, and others (1917-24) led to an Industrial Revolution under Mr. Steel (Stalin), emerging as a Superpower by his death in 1953.
• Japan lost a major World War in the 1940s and was reduced to rubble, after which (with U.S. aid) Japan became the leading new economic superpower by the 1980s, before collapsing after 1989.
• China’s Civil War (the Cultural Revolution, 1966-76) crippled that nation’s economy and people, but they revived under Deng Xiaoping’s industrial revolution to become a factory for the world.
*I covered Germany here, last week, but in this historical context, Germany’s 1866-70 Austro-Prussian conflict was their “civil war,” lasting until the end of the Franco-Prussian war of 1870. Germany was born on January 18, 1871.
Each of these Civil Wars was very costly in human and economic terms. According to R.J. Rummel’s “Death by Government” (democide) studies, China killed over 65-million of its own people under Mao:
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
This makes Mao’s the world’s worst killer, murdering the most number of his citizens: 65+ million:
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
By comparison, our own Civil War resulted in just over 600,000-deaths, about 2% of our population. But it’s useful to compare our rapid growth in the 50-years after our Civil War to China’s growth since 1976. It’s almost like China is following America’s recovery – a century later – in its recent high growth rates.
Past empires over-extended themselves and began to fail: Japan incurred too much debt and hit a speed bump in 1989, from which they never fully recovered. The Soviet Union was outspent in armaments, the only market in which they excelled, while starving their people to gin up a nuclear rivalry with the U.S.
China’s phenomenal growth is now beginning to slow under the wings of its new Dictator for Life, Xi Jinping. Part of this is due to their “one child policy,” from which the nation never recovered and is now paying the price, with massive armies of elderly and retired Chinese who can’t be supported by a shrinking number of young laborers. This also puts pressure on the ubiquitous “Made in China” label.
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
In 2024, Chinese deaths out-numbered births for the first time, signaling a peak population point, after which China is expected to decline for at least the next generation, until 2050 at the earliest, even if they start mass-producing babies now, which the newly spoiled urbanized Chinese are not likely to do.
The result will be an inevitable decline from current 5% (nominal, reported) levels to near zero in 2050.
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
Our job in the U.S. is to learn from the past failures of Britain, Russia, Germany, Japan, and now China.
One brief Postscript on stocks. Semiconductors are doing very well, which makes no sense if the world expects China to invade Taiwan any time soon, since Taiwan accounts for 60% to 70% of the world’s semiconductor manufacturing and up to 95% of the most advanced chips, so I watch the semiconductor sector (as in the SOXX ETF) for a clue as to whether the world now expects China to invade Taiwan. Semi-conductors are up 150% in the last 12-months, and the PHLX semi-index (^SOX) is also up 150%.
All content above represents the opinion of Gary Alexander of Navellier & Associates, Inc.
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Global Mail by Ivan Martchev
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Sector Spotlight by Jason Bodner
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About The Author
Gary Alexander
SENIOR EDITOR
Gary Alexander has been Senior Writer at Navellier since 2009. He edits Navellier’s weekly Marketmail and writes a weekly Growth Mail column, in which he uses market history to support the case for growth stocks. For the previous 20-years before joining Navellier, he was Senior Executive Editor at InvestorPlace Media (formerly Phillips Publishing), where he worked with several leading investment analysts, including Louis Navellier (since 1997), helping launch Louis Navellier’s Blue Chip Growth and Global Growth newsletters.
Prior to that, Gary edited Wealth Magazine and Gold Newsletter and wrote various investment research reports for Jefferson Financial in New Orleans in the 1980s. He began his financial newsletter career with KCI Communications in 1980, where he served as consulting editor for Personal Finance newsletter while serving as general manager of KCI’s Alexandria House book division. Before that, he covered the economics beat for news magazines. All content of “Growth Mail” represents the opinion of Gary Alexander
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