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Big Trouble In Little China

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Epoch Times


  • China is a country of extremes, especially regarding economic forecasts.
  • No matter which official indicator you look at, the Chinese economy is in decline.
  • The most likely outcome of debt deleveraging is going to be a period of low or no growth and major creative accounting exercises to sweep bad debt under the rug.

By Valentin Schmid

China is a country of extremes, especially regarding economic forecasts. There are those who think "China will take over the world" with its technocratic central planning. Then there are those who say its debt bubble is so gigantic, the economy will crash and burn.

The truth, probably, lies somewhere in the middle. And it looks like we are getting closer to knowing the truth.

Official GDP growth is, of course, on track at 6.6 percent for the year 2018, stellar among industrial and even emerging economies. But nobody believes these figures, even though they are the worst since 1990.

"Real GDP fell by 1.7 percent and 0.6 percent in Q3 and Q4, respectively, compared with the official figures showing growth of 6.4 percent and 6 percent," Enodo Economics chief economist Diana Choyleva wrote in a note to clients about annualized growth during the past two quarters of 2018.

According to Choyleva, China is experiencing an unofficial recession.

While this doesn't mean the crash-and-burn scenario is unavoidable, the flurry of official and unofficial economic indicators flashing red make the "take over the world" scenario quite unbelievable for the intermediate future.

Going Down

No matter which official indicator you look at, the Chinese economy is in decline. Retail sales growth is barely above 5 percent, the lowest level since 2003, with automobile sales crashing 13 percent. Total imports in U.S. dollar terms are down 7.6 percent in December of 2018 as compared to the year before.

China's current account balance, or the amount of exports over imports and one of the main drivers of Chinese growth over the decades, is down to 0.37 percent of GDP, from 10 percent in

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Comments (5)

Ben Gee profile picture
The Epoch Time founders got kick because they want political power in China.
hahaha48 profile picture
A complete false report
hahaha48 profile picture
Just remember epoch time is a political organization of an anti China religious cult
Ben Gee profile picture
Big trouble in little China, little trouble in big China!
PICOLOMINI profile picture
Fascinating perspective !
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