Is a Chinese implosion looming?
Though few dare to speculate about it publicly, an economic and political perfect storm is bearing down on China.
China faces an alarming perfect storm of political and economic challenges, raising concerns of potential turmoil. Over the past two decades, the world has experienced disruptive conflicts, a financial crisis, a pandemic, and a shift in global power dynamics. Amid these global shocks, China's situation is particularly worrying.
Politically, President Xi Jinping has consolidated power, eliminating opposition and causing resentment among former officials. This centralization of authority raises concerns about the stability of succession. Historically, China has experienced cycles of calm leading to chaos, a phenomenon known as the "Bad Emperor" problem.
Economically, China's growth is mixed, but downside risks are increasing. The economy faces structural slowdown due to population aging, a property market slump, rising youth unemployment, and growing opposition to private enterprise. China's dynamism often stems from exports, but these are vulnerable to policy responses from the US and Europe.
Worse, China's fiscal capacity is fraying. Warning signs of unsustainable public debt are growing, but China manages this differently than many other states. It relies heavily on state-owned enterprises and land sales to raise resources, rather than through direct taxation. This raises questions about the legitimacy of its tax system and its ability to sustain economic growth.
Written by urgent.news from The Jakarta Post's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
