8 Reasons Why The Economy Of China Will Collapse

eight reasons why the Chinese economy will fall the world gazes at the economic miracle of China China has managed to single-handedly keep the economy of the entire world running for the past few decades without the ongoing efforts of China to grow and renew the whole world would have been in a poorer economic state today but this miracle is likely to come to a grinding hold in the years to come and the longer it takes before that moment arrives the deeper the fall will be it's the world prepared for that kind of downfall for the past decades China transformed itself from a disadvantaged farmer state into a modern world power the average growth rate of China's gross national product has been close to 9% for the past 30 years if the current growth rates continue China will be the largest economy in the world by 2020 but it's that very going to happen I'll give you eight reasons why the Chinese economy will collapse before 2020 reason number one the salary of many Chinese workers has tripled over the past ten years thus Chinese products become more expensive and therefore China will lose its position as a low-wage country and its position as the workshop of the world the international markets will move to other places for cheap labor countries like India Bangladesh Pakistan Vietnam and the Philippines will benefit from this and this will give the Chinese economy a major blow in the near future and since the European wages are under pressure for many years even some Eastern European countries could become suppliers of labor that is cheaper than the Chinese workforce reason number two Chinese production has indeed always been cheap but not always of high quality and some relatively expensive countries remain competitive like Germany and Japan for example because of the very high quality of the products mate in these countries and China will have to reform its labor culture to achieve the same quality levels that we are used to get from Germany and Japan such a reform will take a long time and will cost a lot of money reason number three a significant part of the economic growth in China over the past decades is related to the construction of homes offices shopping malls ropes railway tracks etc however the demand for new construction projects is drying up in many places in China nonetheless the Chinese government is still in the process of building entire new cities for millions of people and right now there are tens of millions of new apartments and occupied in China and this situation could end up to become the biggest real-estate bubble in the history of the world is that bubble bursts it will have a devastating effect on the Chinese economy reason number four the building boom as mentioned in reason number three is largely financed like debt the public and private debt of China have exploded for the past ten years and therefore China faces a considerable risk of a serious credit crisis reason number five China doesn't have a real free market economy as is the case in for example North America most parts of Europe Australia and big economic developments in China are still controlled by the central government and history has shown that large-scale centrally planned economies eventually gets stuck in bureaucracy and demotivation of the workforce reason number six the Chinese government has to wage a permanent political and sometimes military struggle to keep the country together but a few years ago protests for more political and economical freedom have risen for example Hong Kong one of the most important economic engines of the country the police were involved in beating these protests down keeping accounted together by force comes with high cost that could eventually hurt the Chinese economy seriously but allowing China to split up in several independent nations could end China's position as one of the world's leading powers it's a tough choice reason number seven China has been able to maintain its growth recently through cheap energy and for the past few years oil prices have plummeted however energy prices will not remain as low as they are today and once the oil prices will rise again China will have to face significant expenses reason number eight in the years to come China will experience a growing competition from neighboring India India harbors potentially an even larger economic miracle than China within ten years the Indian population is likely to be bigger than the Chinese the growth numbers of the Indian economy matched the Chinese growth and India has a highly developed technology and a growing part of the population is well-educated and speaks English so that means China will soon have an equivalent competitor right at its doorstep that could hurt the Chinese economy severely the development that a Chinese economy is going through now is partly similar to what Germany and Japan experienced during the first decades after World War two those storming developments in Germany and Japan came to an end after 20 years of spectacular growth but there are big differences the population of China is six times larger than the combined populations of Japan and Germany so everything in China occurs on a much bigger scale a collapse of the Chinese economy will have consequences on a scale that has never been seen before on the face of this planet these consequences will not only affect China and its neighbors but the whole world growth like this cannot endure forever the question is not if the Chinese bubble will burst but when the Chinese bubble will burst and when that happens do we know how to deal with the consequences [Music] you

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Keywords: china, economy, collapse, crisis, bubble, real estate, real estate bubble, housing bubble, building boom, asia, chinese, india, economic, GDP, gross national product, grow, growth, economic growth, economy of china, chinese economy, chinese government, chinese people, chinese society, shanghai, beijing, mumbai, india economy, world power, world powers, indian economy, economy of india, hongkong, hong kong, made in china, chinese production, infrastructure, china products, china cheap

Id: dVTqUWW7LpI

Length: 7min 34sec (454 seconds)

Published: Thu Apr 14 2016