Editor: Vladimir Bajic | Tactical Investor
China economy collapse Overexaggerated
April 2023
Despite Western predictions of a collapse in the Chinese economy, such forecasts have been consistently inaccurate over the past decade. China has become stronger and more influential globally, despite challenges and the COVID-19 pandemic. The failure of these predictions can be attributed to ideological bias and a lack of understanding of China’s political system and culture. Western political scientists often make the mistake of measuring China’s political system using Western standards, which leads to misinterpretation of China’s actions and intentions.
Moreover, Western predictions of an economic collapse in China are based on the assumption that China’s economic growth is unsustainable. Still, Chinese experts argue that the country’s growth is solid and sustainable. Therefore, while the future of China’s economy and political system may remain uncertain, Western predictions of collapse or hard landing are unreliable. Source
The China Economy Collapse: A Story of Alarmist Forecasts
The yarn of China’s slackening economic progress has been scaremongering over the past decade, notwithstanding China’s consistent record of over 6% growth. The predictions of failure, such as those by Larry Summers and World Bank economist Lant Pritchett, of a “reversion to the global mean” for China have proven unfounded. China’s financial sector, which witnessed spectacular expansion after 2009, has also been subject to prognostications of impending economic collapse, but contemporary commentary suggests that the industry could become safer over time.
There are ample examples of nations that have effectively transitioned from poverty to prosperity, negating the notion that collapse is inevitable. The key to avoiding a financial crisis lies in practical policy-making, with a sturdy interventionist government and technically adept experts amalgamating the allocating might of free markets with regulation. China’s growth rate of 6% is sufficient to tackle the mammoth challenges ahead, provided judicious policies are implemented. Source
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