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Tags: gordon chang | china | economy | trade | evergrande

Gordon Chang Predicts China's Economy Headed for Collapse

Gordon Chang Predicts China's Economy Headed for Collapse

Shangxia Jiu Lu Pedestrian Street is the main shopping area of Guangzhou, China. (Inge Hogenbijl/Dreamstime)

By    |   Tuesday, 06 September 2022 06:32 PM EDT

China expert Gordon Chang believes the country's economic stimulus efforts amid an imminent recession are finally falling flat, leading to the possibility of total economic collapse.

The frequent Newsmax contributor argued on Monday in an opinion piece for 19FortyFive that, despite Chinese regulators forcing high loan quotas, companies are still not launching new projects as pessimism grows.

"In the past, when the economy look[ed] fatigued, China's business community could count on the central government to create growth with massive stimulus programs," Chang wrote.

Now, however, the country is "exponentially incurring indebtedness, perhaps creating debt about seven times faster than it has been producing nominal gross domestic product," he added.

Chang recently interviewed fellow China expert and author Anne Stevenson-Yang, who told him that "the Chinese have long compared their country to a train whose last car is on fire."

"That is China and debt," Stevenson-Yang said. "If you add enough money to the system, you can keep refinancing the old debt, but you have to add money exponentially."

With that in mind, Chang estimates that the total amount of debt accumulated by the Chinese Communist Party could be equal to 350% of the country's gross domestic product.

He also quoted a recent Twitter thread from Peking University professor Michael Pettis, who suggested that the country could be entering a prolonged period of "reversing much of the previously recorded unsustainable growth."

"Last fall's failure of Evergrande Group, which effectively triggered other defaults in the crucial property sector, is a warning of what will happen" nationally, Chang continued.

© 2023 Newsmax. All rights reserved.


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China expert Gordon Chang believes the country's economic stimulus efforts amid an imminent recession are finally falling flat, leading to the possibility of total economic collapse.
gordon chang, china, economy, trade, evergrande
256
2022-32-06
Tuesday, 06 September 2022 06:32 PM
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