The chapter, termed Legalized Politicization Era (2010–present), examines the role of law in securing a new political–economic equilibrium. In this era, the consequences of state capitalism, China’s economic turning point, and a legitimacy crisis in the Party-state’s rule, advanced the use of law in two directions: intensifying the presence of the regulatory state in the market on the one hand while shifting market governance powers directly to the CCP itself on the other. The chapter describes how in these developments the law has been assigned a meaningful and more explicit role in steering capital flows and structuring markets. It argues that taking notice of the two functions of law has become ever more relevant.

After 2012, the Chinese economy entered a phase of declining growth. The GDP growth rate of 6.1 percent in 2019 just before the COVID-19 pandemic was the lowest in nearly thirty years. What caused the slowdown? Is the country falling into the so-called middle-income trap? These questions are addressed in Chapter 8. The chapter first shows why the “middle income trap” does not really exist and that before reaching high-income status, a country’s growth rate is unrelated to its income level. It then shows that China’s slowdown was mainly caused by a precipitous decline in investment growth. This decline was initially caused by the sweeping anti-corruption and anti-pollution campaign during 2013–2015. It was worsened by the misguided contractionary macroeconomic policies in 2016 and 2017 due to a mistaken belief by policymakers and economic commentators that China had invested too much and the corporate sector had piled up too much debt. In other words, China’s downturn before COVID-19 was not inevitable, and its economy could have grown faster.

Nation-states are the fundamental building blocks of the modern international order. Order problematics and order systematics also originate from these building blocks. Today, the keystone nation-states are undergoing a severe test. The fragmentation of identities in the cultural dimension, arguments over sovereignty and legitimacy in the political dimension, the problematics of sustainable development in the economic field, and the ecological consequences of climate change, present national orders with serious challenges.

The geopolitical earthquake shook and tested the territorial existence of countries within its seismic zone; the security earthquake, the basis of states’ legitimacy; the global economic earthquake, states’ sustainability in terms of economic resources; and the structural earthquake, their institutional fabric.

The sixth chapter of the book discuses the possibility and conditions of inclusive national governance with its humane/cultural, geopolitical, legitimacy (freedom and security balance) and economic components.