To hear some say it, China is currently pursuing aggressive foreign and economic policies on several related fronts. It is asserting its hegemony over the western Pacific Ocean with island building and military installations in the South China Sea, an important trade lane. It is actively investing in both advanced and developing economies to secure technologies, products, and commodities. And it is pursuing economic policies that will bolster the economy both domestically and abroad.

It is also well known that China’s economy has slowed in recent years—although still growing at comparatively robust rates—according to official numbers—as has its trade volumes.

All of this leads some to conclude that China’s economic trajectory will involve transformation into a healthier and very large economy. Others, pointing to mounting debt and demographic deficits see an inevitable economic crisis for the People’s Republic.

But a recent paper authored by scholars at the American Enterprise Institute, a conservative think tank in Washington, says that the “preponderance of evidence is for stagnation.”

Among the signposts for this conclusion are private wealth figures reported by Credit Suisse which show that from the end of 2011 to the middle of 2015, Chinese net private wealth grew 19 percent, whilenet private wealth in the U.S. grew 43 percent.

Another involves the history of Chinese economic policy. They heyday of market-oriented reform stretched from 1978 to 2002, but in 2003, a new government reversed course and declared and that “state-owned banks lending to state-owned enterprises should continue to constitute the core of the economy…”

“The PRC’s economic weakness did not appear in 2015, as some seem to think,” the paper concludes. “It did even not begin with the 2008 financial crisis. It began in 2003.”

The global financial crisis of the last decade dealt a double blow to the Chinese economy. As foreign demand dropped Beijing embarked on a huge stimulus through state-run banks on top of an earlier public investment surge.

“Loans grew 32 percent in 2009 alone, even as profit opportunities vanished,” says the paper. “At this point the stagnation path became clearly visible.”

Since that time, economic developments in China have not been favoravble. It’s money supply is 75 percent larger than that of the U.S. in a smaller economy. Industry overcapacity ballooned from three sectors in 2003 to 19 in 2013. China’s national debt is over $25 trillion and growing. Two-thirds of that volume has been accumulated in the past nine years.

China’s capacity to innovate has also been compromised through top-down government programs. “It is highly unlikely the government will be able to anticipate years of change in computing, telecom, energy, and elsewhere,” says the report.

Intellectual property protections in China are still not advanced, creating a disincentive to innovate. State-owned enterprises still dominate some two dozen industries. Pro-market reforms since 2013 have been anemic at best.

“Absent powerful pro-market reform that is nowhere in sight,” the paper concluded, “true economic growth will halt by the end of this decade…”

The most important implication of that conclusion concerns the dollar and the Chinese currency, the RMB. “The RMB will fall well short of challenging the dollar, and the future of the world’s reserve currency will depend almost entirely on American choices,” the authors conclude.

For the U.S., a stalled Chinese economy “will be primarily a lost economic opportunity.” China’s “trade role as a gigantic low-margin manufacturer has brought benefits but is certainly not a necessity,” says the report. “The enormous opportunities that many American companies anticipated will not materialize.” Other economies, especially energy and metals exporters, are much more vulnerable to Chinese economic weakness.

While “a stagnant China will still be large and important,” its economic trajectory means that “Washington has more strategic leverage in the bilateral relationship than it imagines.”

China depends on the U.S. for secure sea lanes, for contributions to its food supply, and as a repository for its finances. “If relations deteriorated,” the paper concluded, “the U.S. can inflict far more economic harm on China than the reverse.” On the other hand, “a stagnating China constitutes a far more unpredictable geopolitical rival.”