Skip to main content

Chinese police officers cargo ship -/AFP/Getty Images

R.I.P. Chinese Exceptionalism?

After decades of strong and steady growth, China has developed a reputation for economic resiliency, even as it piles up ever more domestic debt. But the prospect of declining exports, alongside a weakening currency, could derail its debt-defying trajectory.

NEW DELHI – From Argentina to Turkey and from South Africa to Indonesia, emerging markets are once again being roiled by financial turbulence. But let us not lose sight of the biggest and potentially most problematic of them all: China.

Over the past few decades, China’s growth has appeared to violate certain fundamental laws of economics. For example, Stein’s Law holds that if something cannot go on forever, it will stop. Yet China’s debt keeps on rising.

Indeed, according to the International Monetary Fund, Chinese corporate, government, and household debt has increased by about $23 trillion in the last decade alone, and its debt-to-GDP ratio has risen by around 100 percentage points, to more than 250%. That is orders of magnitude above the level at which financial crises normally occur.

We hope you're enjoying Project Syndicate.

To continue reading, subscribe now.

Subscribe

Get unlimited access to PS premium content, including in-depth commentaries, book reviews, exclusive interviews, On Point, the Big Picture, the PS Archive, and our annual year-ahead magazine.

https://prosyn.org/SdU2dBJ;
  1. drew47_Drew AngererGetty Images_trumpgiulianasmiling Drew Angerer/Getty Images

    Will Trump Be Removed from Office?

    Elizabeth Drew

    Assuming the US House of Representatives votes to impeach President Donald Trump, the fact remains that there are far fewer votes in the Senate than will be needed to convict him and remove him from office. But the willingness of Congress – including the Senate – to continue tolerating his dangerous conduct is now truly in question.

    0
  2. rudd9_Darrian TraynorGetty Images_climateprotestburningaustralia Darrian Traynor/Getty Images

    Unsustainable Australia

    Kevin Rudd

    Before the current conservative government came to power in 2013, Australia was well-positioned to make the necessary transition to a low-carbon economy. But now, the country is heading in reverse, and has already fallen behind most developed countries, and even China, on reducing emissions and building resilience against climate change.

    1

Cookies and Privacy

We use cookies to improve your experience on our website. To find out more, read our updated Cookie policy, Privacy policy and Terms & Conditions