<
https://medium.com/@financefusionhub/the-looming-economic-catastrophe-china-on-the-brink-of-collapse-40f44a22bc38>
"Over the past few decades, China has been lauded as the rising titan of the
global economy, a nation poised to displace the United States as the world’s
preeminent economic power. Yet, beneath the surface of this seemingly
unstoppable ascent lies a fragile foundation, riddled with deep-seated
structural weaknesses and economic distortions. These issues, long masked by
Beijing’s tight control over information and economic data, are now surfacing
with alarming rapidity, threatening to upend the very stability of the Chinese
state.
At the heart of China’s economic troubles is an unsustainable growth model, one
that relies heavily on debt-fueled investment and state intervention. Since the
turn of the millennium, China’s GDP growth has averaged an impressive 9% per
annum. However, this growth has been accompanied by an explosion in debt, with
the country’s total debt-to-GDP ratio ballooning from 140% in 2007 to over 300%
today. This figure is staggering, especially when compared to other major
economies; for instance, the United States, which has a total debt-to-GDP ratio
of around 250%, or Germany, which stands at approximately 175%.
The Chinese Communist Party (CCP) has long touted this growth as evidence of
its economic prowess and legitimacy. Yet, much of this growth has been driven
by an unprecedented real estate boom, a sector that now accounts for nearly 30%
of China’s GDP. The housing market, once seen as the engine of China’s economic
miracle, is now on the brink of collapse. With property prices in major cities
like Beijing and Shanghai reaching stratospheric levels — averaging over 41
years of annual income for a typical two-bedroom apartment — the market has
become increasingly unaffordable for the average Chinese citizen. This
unsustainable bubble, inflated by speculative investment and state-driven land
sales, is now deflating, with potentially catastrophic consequences for the
broader economy."
Cheers,
*** Xanni ***
--
mailto:xanni@xanadu.net Andrew Pam
http://xanadu.com.au/ Chief Scientist, Xanadu
https://glasswings.com.au/ Partner, Glass Wings
https://sericyb.com.au/ Manager, Serious Cybernetics
