2024-07-17 07:02:00 ET
Summary
- Unless the Chinese government introduces major structural economic reforms that encourage domestic consumer spending, China could experience a Japanese-style lost economic decade.
- That could have major consequences for the world economic outlook given that China is the world’s second-largest economy and, until recently, was the world’s main engine of economic growth and its main consumer of international commodities.
- The Chinese government in an unenviable position to deal with the bursting of the country’s epic housing and credit market bubble. It knows that flooding the market with increased liquidity and resorting to fiscal pump priming will only add to the country’s long-term debt problem.
This week’s disappointing Chinese GDP (gross domestic product) numbers showed that Chinese economic growth has slowed to 4.75 percent from the very rapid annual economic growth rate of seven to eight percent during the 2010s. This should be a wake-up call for Chinese economic policymakers. It should be viewed as confirmation that the Chinese economy is in deep trouble and that its economic growth model is now well past its sell-by date....
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China's Economy Is In Deep Trouble