China: The Bubble that Never Pops

Despite various challenges, including an economic bubble, financial instability, real estate collapse, bankrupt factories, and trade tariffs, China's economy continues to grow and expand its international influence. Thomas Orlik, a veteran of more than a decade in Beijing, examines China's fragile fundamentals and resources for resilience, tracing the policy steps and missteps that have brought China to the brink of a Lehman moment credit crisis. Orlik explores the financial risks and positions China in the context of a rolling series of global crises, suggesting that the magnitude of a potential collapse would be tremendous and have far-reaching consequences for China and the world.

Format: Paperback / softback
Length: 272 pages
Publication date: 15 November 2022
Publisher: Oxford University Press Inc

The Chinese economy faces numerous challenges, including a potential financial bubble, a collapsing real estate sector, bankrupt factories, and overwhelming bad loans for banks. The country's urban landscape is dotted with abandoned ghost towns, while industrial zones are plagued by zombie firms. Trade tariffs hinder China's access to global markets, further exacerbating its economic woes. Despite these daunting circumstances, China's growth continues, wealth rises, and international influence expands. Many experts predict a future collapse of China, but it remains uncertain when this will occur.

In his book "The Coming Collapse of China," Thomas Orlik, a veteran of more than a decade in Beijing, sheds light on China's fragile fundamentals and resources for resilience. Orlik conducts extensive interviews with Communist cadres, shadow bankers, and migrant workers to gain a unique perspective on China's past, present, and possible futures. He traces the policy steps and missteps that have brought China to the brink of a Lehman moment credit crisis, from Deng Xiaoping's reform and opening to Donald Trump's trade war. Orlik delves into the balance sheets of banks, corporations, and local governments to assess the depth of financial risks. He compares China's situation to previous global crises, such as Japan in 1989, Korea in 1997, and the U.S. in 2007. By mapping possible scenarios, Orlik explores what would happen if the financial bubble that has defied expectations finally bursts. The magnitude of the shock to China and the world would be significant, with far-reaching consequences for both countries. For those in the West who are concerned about China's rise as a geopolitical challenger, the alternative scenario could be even less palatable.

Despite the challenges facing China, there are reasons for optimism. The country has a large and diverse population, a vast resource base, and a strong commitment to innovation. China has also made significant progress in addressing some of its structural issues, such as reducing corruption and increasing investment in infrastructure. However, it will take time and sustained efforts to fully address China's economic and social challenges.

In conclusion, the Chinese economy faces numerous challenges, but it is also resilient and has the potential to continue growing and evolving. While the future remains uncertain, it is important to understand the underlying factors that are driving China's economic development and to be aware of the potential risks and opportunities that may arise. By engaging in informed dialogue and taking proactive measures, countries can work together to promote stability and prosperity in the global economy.

Weight: 434g
Dimension: 155 x 235 x 20 (mm)
ISBN-13: 9780197598610