Why China will sink deeper into economic doom

In 2024, China will sink deeper into the tar pit of economic stagnation caused by statism and a refusal to embrace free market capitalism.

Xi Jinping, chairman of the Chinese Communist Party, prioritizes political stability and the primacy of the CCP over a dynamic economy. The data from countries all over the world are clear: big government and national industrial policy lead to stagnation.

China’s economic problems are well known: an enormous private sector debt burden, a real estate market in deep recession, an excessive household savings rate, accelerating demographic implosion, extraordinarily high youth unemployment, and decisions to reject state-of-the-art Western technologies. The very high internal savings rate, 45%, is over double the rate of the United States. Chinese households save because there is no social safety net. China’s efforts to encourage domestic consumption continue to fail. Deflation has taken hold in the consumer sector.

The Chinese government misallocates the high savings rate.
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