Economics Explained China’s Crumbling Economic Story
Nov 20, 2023
Explore the transformation of Shenzhen into an economic powerhouse and China's rapid growth. Discuss concerns about economic collapse and the disparity between China's growth rate and Western economies. Examine the impact of assuming strong career growth on personal finances and China's provincial debt challenges. Discover the consequences of nominal wage increases, inflation, and deflation on China's economy.
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Unsustainable Growth Expectations
- China's economic planning was based on the expectation of long-term double-digit growth. - Slower growth leads to problems like ghost cities and unoccupied infrastructure investments.
Population Decline vs Growth Planning
- China's population decline contradicts growth assumptions for urban migration. - Continued construction relies on expected population growth that is not happening, risking many investments.
China's Massive Government Debt
- China’s provincial government debt is estimated at 150% of GDP, beyond national debt at 77%. - Combined government debts alarmingly exceed 200% of the country's GDP, threatening economic stability.