China’s Bill Comes Due

The following link is to an article entitled “China’s Bill Comes Due” by Mickey D. Levy. This article appeared in the Hoover Institution’s Defining Ideas journal series on September 19, 2023 (the link does not require any subscription). Mr. Levy is Chief Economist US, Americas and Asia at Berenberg Capital Markets, a visiting scholar at the Hoover Institution, and a member of the Shadow Open Market Committee.

Summary:

China has evolved from an engine of global growth to a source of weakness and risk, and it has its leaders and their economic policies to blame. Sizable government-generated excesses in real estate and debt are unraveling, weighing heavily on economic performance and government finances. Declines in household net worth are undercutting confidence and consumer spending. Many of the largest land developers have gone into bankruptcy or defaulted on their debt. Global economies and trade are also adversely affected. The US and Japanese experiences with real estate bubbles suggest that China probably will need years to unwind its excesses and revive dampened economic activity, and a fundamental assessment points to dramatically slower potential growth.

Link: China’s Bill Comes Due by Mickey D. Levy

Mickey Levy, mickey.levy@berenberg-us.com

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