ABOUT THIS EPISODE
After the global financial crisis, China added a third of global GDP to its bank assets in just eight years... the largest single-country credit expansion in at least a century.
Today investment is contracting, growth is less than a percent, and the financial system that fueled China's growth is now the thing holding it back.
Logan Wright, partner at Rhodium Group and my former boss, joins ChinaTalk to discuss his new book, Broken China: How the Economic Miracle Shattered and What It Means for the World.
Brad Setser of the Council on Foreign Relations co-hosts.
We discuss…
- The crisis that already happened: why the September 2021 protests in Evergrande's lobby were China's catharsis moment
- Decay instead of collapse: why credit growth fell from 18% a year to 5%, why Beijing keeps rolling over loans to zombie state firms, and why in China "the path to crisis is reform"
- Jordan and Brad discuss Xi's Perspective: Does supply-chain dominance matter more than GDP?
- Twelve million graduates a year, the youth unemployment numbers that vanished in 2023, why all of China's new strategic industries add up to about 6% of GDP, and why a $10,000 BYD doesn't matter if your kid can't get a job
- Who's paying for China's AI?
Plus: Logan's case that the US no longer has a systemic economic rivalry with China, and Brad's pushback that Chinese supply-chain controls have so far beaten Western demand-side leverage
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