China’s Zombie Economy

In the early 2010s, there was optimism that China’s economy would continue to grow at a rapid pace, surpassing the United States and embracing political liberalization. However, these forecasts have proven to be naive. Even before the COVID-19 pandemic, China’s economy had slowed down and faced a domestic debt crisis. The anticipated economic rebound after pandemic restrictions were lifted did not materialize, leading to high youth unemployment and deteriorating economic conditions. It is now acknowledged that China may never catch up with the US, and there has been a resurgence of state intervention and suppression of dissent under President Xi. China’s decline actually began over a decade ago due to overaccumulation of debt and unprofitable construction projects. The current weakening of the economy and increasing authoritarianism are the logical outcomes of China’s uneven development and capital accumulation.

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