David Hebert
If there is one thing we can count on, it is the annual warning that China is on the verge of collapsing. Don’t believe me? Here are articles from 2012, 2013, 2014, 2015, 2016, 2017, 2018, 2019, 2020, 2021, 2022, 2023, and 2024. And here is another article with citations going back to 1990, all warning about the same thing: that China’s economy will crash and it will crash hard.
Remarkably, we also routinely hear the tale that China is poised to become the world’s next economic superpower. And while China’s economic output is impressive in raw terms, once we realize that China has a greater population than the combined populations of eight of the other nine top-ten manufacturing superpowers, it becomes clear that their impressive manufacturing output is entirely driven by their population, not their economic viability. On a per-capita basis, they certainly do not qualify as a “superpower.”
Despite these contradictory warnings, China has not collapsed or become a bona fide economic superpower. So, what gives? How can a country simultaneously be on the verge of disaster and greatness?
The answer lies in understanding China’s economic system (party-state capitalism) and the difference between economic problems and technical problems. Party-state capitalism can be an effective way to solve technical problems for a short while, but the system’s inability to solve economic problems dooms the system and the people who live under it.
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