In my video, eight signs the Chinese economy is terminally sick, a viewer left a long passionate comment defending on China’s economy. The viewer said, “The housing collapse in China was controlled. Demographics aren’t a problem. Youth unemployment isn’t what it looks like. The West is the one in trouble. China will ultimately win. Now, I welcome serious comments like this, and that’s why I’m making this video, because it’s time to separate fact from fantasy. And trust me, there’s a lot of fantasy out there when it comes to China’s economy.
And let’s break it down point by point. First, the bursting of the housing bubble in China is far from controlled. The viewer said, and I quote, “China burst the housing bubble itself. It caused some pain, but they let it collapse in a controlled way.” Now, here’s the reality. Yes, Beijing wanted to cool off the housing market for a long time, and they introduced the three red lines to force developers to delever.
But the result, a financial contagion that spiraled out of control. Ever Grande’s default alone shook global markets. Country garden is on the brink. Thousands of unfinished apartment projects are sitting empty. Many buyers pay for homes they will never get. Local governments are starved of land sales revenue which used to account for 30 to 40% of their budgets. Now they’re cutting basic services, even salaries to civil servants and doctors. Consumer confidence has cratered because for many middle-class Chinese, property was their main store of wealth.
Now that pillar is gone and no this is not a controlled collapse. It is a rolling crisis that is spreading across the entire economy. Another viewer left a very similar comment in my a signs Chinese economy is terminally sick video regarding the collapse of uh Chinese property bubble which I break it down in great detail in this video and you may want to check it out. Next, demographics. The viewer says population collapse can be addressed through tax cuts, immigration, automation, and moving up the value chain.
In theory, sure. In practice, China is already trying and it’s not working. Fertility rate, a record low, 1.09 in 2023, one of the lowest in the world. Births in China have fallen for seven straight years. Tax incentives, they have been introduced, but families still aren’t having kids. Why? Because property prices remain high, education is hyper competitive, and job prospects are uncertain. Immigration, are you kidding me? That is politically and culturally impossible in China.
There’s no history of absorbing large numbers of foreigners and the government is not prepared to shift its national identity around immigration the way countries like Canada or Australia have. Automation and moving up the value chain. Yes, China is making progress, but moving millions of lowskilled workers into advanced sectors take decades, not years. Meanwhile, the workforce is already shrinking and the Asian population will impose massive fiscal burden. Demographics are destiny and no policy toolkit can reverse the clock on this one fast enough.
Now, let’s talk about youth unemployment. This was the part of the comment where I saw the most most wishful thinking. The viewer said youth unemployment situation is actually it was high because of how it was counted. So once adjusted it’s no worse than the US. But here’s what really happened. In 2023, China stopped publishing use on employment data. Why? Because the numbers were becoming politically dangerous.
You know the rate had crossed the 20% level and even after adjusting the methodology Beijing’s own leadership still acknowledges this is a deep concern and the deeper problem is this China is producing more university graduates than ever but the economy is just not creating enough quality jobs to absorb them a recent survey showed over 40% of new gradu graduates were taking jobs well below their qualifications or not finding jobs at all.
This is a structural mismatch between education and the economy and reclassifying the data doesn’t fix thefact that young Chinese are increasingly frustrated, undermployed, and economically insecure. and that’s a dangerous long-term risk for social stability. The viewer also claimed that the world is turning away from the US and toward China. Let’s take this apart. Yes, like I said yesterday, South Korea is being naive and hagging, but no one is fully decoupling from the US and the trend is clear. Foreign direct investment FDI into China is at its lowest level in in two decades.
Apple, Samsung and Condolis other companies are moving parts of their supply chain to India, VNI, Mexico and other destinations. The EU is now launching trade props into Chinese EV subsidies because the imbalance just too large to ignore. And Japan Ashang, they’re engaging with China, but they’re also strengthening ties with the US and diversifying their economic exposure hard. Turning away from the US is a complete misread of what is happening. What we are seeing is drisking, dechininaing, and it’s accelerating. Finally, the viewer said, “You probably get your facts from Peter Zahan.”
No, I don’t. I respect Zahan’s work, but my analysis is based on much broader sourcing. China’s own National Bureau of Statistics Statistics data, uh, People’s Bank of China reports, IMF and BIS analysis, corporate filings from global companies operating in China, academic studies from Chinese universities and think tanks. And here’s the key point. Many respected economists inside and outside China, including Chinese voices, now acknowledge that the country faces deep structural challenges.
This is not cherrypicked doommongering. This is what the data is telling us if you’re willing to just look at it objectively. Now, is the US perfect? Of course not. Far from perfect. Does the US have major economic and pro and political problems that needs to be resolved? Absolutely. But here’s the mistake I keep seeing in arguments like this. Pointing out America’s flaws doesn’t magically make China’s problems disappear. Right now, China’s old growth model, the debt field property uh statedriven investment model is running out of steam.
The new growth model not ready yet. That’s why growth is slowing. That’s why deflation pressures are mounting. That’s why consumer sentiment is weak. That’s why use unemployment remains a ticking time bomb. These are facts, not opinions. So to the viewer who left that comment, thank you for engaging. But this is why the story you told doesn’t hold up.
And on this channel, we will keep speaking the truth about the state of the Chinese economy, no matter how uncomfortable it is. Thanks for watching. Now, if you enjoyed this breakdown, I think you would also uh enjoy this video where I responded to another China bull who commented that the Chinese economy is doing well. So, make sure you check it out and uh I’ll see you in the next one.
