(ENG)China’s Economic Collapse Threat: Causes and Global Impacts

China has experienced unprecedented economic growth over the past 40 years, becoming the world’s second-largest economy.

 

However, this growth is now hitting major roadblocks, including a real estate bubble, overinvestment, and severe energy dependency.

 

The potential collapse of China's economy is not just a domestic issue, but one that could send shockwaves through the global economy.

 

In this regard,

I introduce the program titled "Why China's Economy is About to Collapse" from Aaron Watson in June 2024.

Reference: Youtube channel "Aaron Watson"

Aaron Watson 발췌

---

1. China's Economic Growth and Debt Bubble (00:00 - 01:46):

• China experienced rapid economic growth from 1980 to 2019, lifting over 800 million people out of poverty.
• The real estate sector and manufacturing boom, powered by cheap capital and energy, is now hitting major obstacles, leading to a looming debt crisis.
• The Chinese Communist Party (CCP) faces a $50 trillion real estate bubble, overinvestment, and rising energy costs.

Aaron Watson 발췌

 

2. Impact of Real Estate and Overinvestment (05:24 - 07:09):

• China's real estate sector is overbuilt, with enough vacant homes to house three billion people.
• Property accounts for over 60% of Chinese household wealth, making the economy heavily reliant on real estate.
• This overinvestment could trigger a balance sheet recession, with property prices crashing and indebted households and developers being forced to sell.

 

Aaron Watson 발췌

 

3. China's Energy Vulnerability (16:56 - 18:38):

• China is heavily reliant on imported energy, with 70% of its oil being sourced from foreign suppliers, making it vulnerable to global supply chain disruptions.
• Any rise in global energy prices could significantly destabilize the economy, especially as geopolitical tensions increase in key oil-producing regions.

Aaron Watson 발췌

 

4. Financial System Strain (19:16 - 20:44):

• China's largest banks are deeply tied to the real estate sector, with trillions of dollars in property loans.
• These state-owned banks face a tough choice: either reduce lending, causing business failures, or continue risky lending, leading to more defaults and worsening the economic downturn.

Aaron Watson 발췌

 

5. Potential Economic Collapse and Global Impact (21:52 - 23:00):

• If China devalues its currency, it could ease domestic debt but might trigger capital flight and extreme volatility in global markets.
• Economies like Germany, Australia, and Brazil, which are closely tied to China, would feel significant economic shocks.

Aaron Watson 발췌

---

The crisis facing China's economy is more than just a set of economic indicators—it has far-reaching implications for the global economy.

 

The collapse of its real estate market, its energy dependence, and instability in the financial system will not only affect China but also have a significant impact on the international community.

 

A Chinese economic collapse could severely impact major trading partners worldwide, especially countries like Australia, Brazil, and Germany. The need for solutions is urgent, and the global community must prepare for the potential fallout of this crisis.