China’s Crumbling Economic Story

Deng Xiaoping's reforms in the 80s transformed Shenzhen, a small town near Hong Kong, into an economic powerhouse. China's rapid growth lifted millions from poverty but did it grow too quickly to be sustainable? Now China faces deflation, and experts are worried that this could spell the end of the economic miracle.

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[moldockk]

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

[vedants.vispute]

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.

[Aria-cddq]

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

[shadowsniper]

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.

[kevinbarry]

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

[bobbab]

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.

[asdisskagen]

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

[MatthewBurns]

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.

[NewMoneyYouTube]

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

[saeedhossain]

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

[Marklarn_]

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

[zarategabe]

Every year there is a new story about how China will crumble soon. Then the next year they say, "wait! this time is different"

[Junior-zfyy]

Ive watched a video every year about chinas economy on the brink of collapse at least once every year for the past 10 years. This fulfils the 2023 quota, onto 2024!

[LeoMeisels]

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

[jaazz]

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 👍

[dansands]

Thank you for the actually good rundown on why deflation can cripple economies used to inflationary policy. The idea that Joe Consumer is smart enough to go "wow due to inflationary policy, the value of my currency is decreasing over time, so I should spend my earnings now" is ridiculous. "Wow, I'm getting a raise every year! I should be good to spend this now" makes a lot more sense.

[Trex]

"Please China, collapse, I've been making the same prediction for 40 years now..."

[captiannemo]

It’s funny how the issue of rezoning farmland to urban and then selling it as a lease for urban development and that the whole process makes up a large percentage of local budgets… is omitted.

[DecemberNames]

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.

;)

[crishhari]

China's collaspe was an yearly event but now it has become a monthly update. 😅