China’s Crumbling Economic Story

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I'll never understand why economists are always surprised when a economy doesn't grow forever when no economy has ever grown consistently forever

China has built the infrastructure very extensively in a short period of time. Impressive, but in the book of economics, maintenance of this infrastructure is what will make China really sweat out its budget. Building extra lanes, ramps, buildings temporarily inflates GDP for the year, but if no ones using it, it would crumble in a few decades. The entire economic system of China is built upon this.

The fact that we get free videos from Economic Explained on YouTube is priceless, keeping the education and knowledge alive. 🙏🙏🙏

Very good explanation of the debt. Would love to see something on de-globalization and how much affect it is really having on China (i.e. globalization not going away but is getting realigned and re-worked in ways unlikely good for China). Sort of glossed over demographics too.

Another huge problem that you did not mention is the failing banks. These banks lent a lot of money to the provinces, and also funded much of this real estate development that is never going to get paid back

As a foreigner living in China for almost 10 years I'd say they recent economic downturn is mostly about horrible Covid regulations. Many small business were struggling and closed, leaving many families broken because they invested most or all of their savings into them just to see their families and marriages collapsing. This is surely not the only reason but the most traumatic and demoralizing that might last for a few years. Government policies related to family planing, education and foreign investments are also ridiculous, it seems that Xi is becoming the new Mao in so many ways.

Great to meet you today Michael - and awesome video! Keep it up bro! Great to see your ongoing success ✌️

you did great with this one, keep doing it! I just wanted to take a moment to say how amazing your video was! I was really impressed with the quality of the footage, the editing, and the overall presentation. You did a great job of explaining the topic in a clear and concise way, and I learned a lot from watching your video. ;)

The issue I'm concerned about the most is whether China, specifically the provincial governments, are actually being truthful in their reported debts. Their reported incurred debts are a massive amount already. Even if they're only hiding, on average, 10-15% of their debts through number fudging, that's an extremely significant amount that makes an already shaky situation look even more unstable. That's not even to mention that they could be hiding a much more significant amount of debt, hoping that they can string the people and National government along long enough that the economic growth will perpetuate their Ponzi-scheme like cycle of selling land to cover their debts, only to incur more debt and need to sell more land.

"when people are fearful, be greedy, when people are greedy, be fearful " it's a good mantra if you're already rich

I was kinda mad when you brought debt to GDP as I was sure you'd ignore other types of debt, but you didn't, even included corporate, great job 👍

One of the main problems with using GDP as it stands, is that it includes government spending. Government has nothing that it doesn't first Take from the present or the future. Governments actions also distort market signal information, resulting in malinvestment that is one of the factors in the boom bust business cycle.

"Optimistic recklessness" is a fine synonym for "corruption." 😂😂😂

Also an important factor is the ratio of debt in foreign currency would be nice to explore this aspect as well

Another fantastically produced and massively informative piece. Appreciated! (and terrified)

Hi everyone! What an amazing video. I'm looking for someone reputable and trustworthy that can provide me with investment advice and good ways to save while making high returns.

Surprised you didn’t mention what many consider one of the worst parts of deflation, is when it’s combined with high debt. Since a yuan is worth more in the future, their debt load actually increases in real terms each year and can either trap them in never paying it off or just be a bigger and bigger portion of their income each year.

It’s almost like there is a finite amount of end users in a population and populations can’t exponentially grow in perpetuity.

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