In terms of the economy, it's not a question of "collapse" but rather which dead end will it have.
China needs to liberalize their economy in order to stimulate consumer demand. The problem is they can't do that without liberalizing the political system, and the CCP is not about to give up that much power.
In terms of the economy, it's not a question of "collapse" but rather which dead end will it have.
China needs to liberalize their economy in order to stimulate consumer demand. The problem is they can't do that without liberalizing the political system, and the CCP is not about to give up that much power.
Which leaves government stimulus, all debt financed, as the means of boosting the economy. This is what they've been doing since the Great Financial Crisis, and they are about maxed out on how much more stimulus they can apply.
All of which greatly limits the potential outcomes for China. If Beijing lets Country Garden implode with no bailout, a Lehman moment is likely. If Beijing does bail Country Garden out they are looking at a zombie real estate sector depending on government spending, which is almost certain to lead the economy further down the path of Japanification, which will be worse for China because China's per capita income is so much smaller.
Does this mean apocalyptic collapse? No. But it does mean something other than prosperity is what lies ahead for China.
In terms of the economy, it's not a question of "collapse" but rather which dead end will it have.
China needs to liberalize their economy in order to stimulate consumer demand. The problem is they can't do that without liberalizing the political system, and the CCP is not about to give up that much power.
Which leaves government stimulus, all debt financed, as the means of boosting the economy. This is what they've been doing since the Great Financial Crisis, and they are about maxed out on how much more stimulus they can apply.
All of which greatly limits the potential outcomes for China. If Beijing lets Country Garden implode with no bailout, a Lehman moment is likely. If Beijing does bail Country Garden out they are looking at a zombie real estate sector depending on government spending, which is almost certain to lead the economy further down the path of Japanification, which will be worse for China because China's per capita income is so much smaller.
Does this mean apocalyptic collapse? No. But it does mean something other than prosperity is what lies ahead for China.