China’s property bubble will cause drama, one way or another
Property bubbles fuelled by surging debts tend to end in sharper economic downturns than what China has seen, so a crisis scenario is more probable than a big bounceback.
China fell off “the miracle path” years ago and now many are catching up to the story. An ageing population, high debt levels and a meddling government are turning the country into a fading power like Japan of the 1990s, when its economy slowed sharply but avoided an outright crisis.
Since the consensus call is reliably off – a year ago it was for a reopening boom in China and an inevitable recession in the US – it’s worth asking what the “Japanification” scenario is missing.
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Financial Times
Ruchir Sharma is a writer and investor, and the author of four books, including most recently "The 10 Rules of Successful Nations". He is chairman of Rockefeller International.
