China's Economic Excesses Destabilize Global Trade
-
China is overproducing goods and exporting the excess supply onto global markets, hurting other economies. Xi Jinping is reverting to overinvestment in tradeable goods like steel rather than reforming.
-
China's trade surplus is much higher than officially reported once hidden reserves and customs data discrepancies are accounted for. This is destabilizing world trade.
-
China is exporting deflation by slashing export prices, turning into a serious trade shock for Europe and elsewhere. Firms cut prices as domestic demand slumps.
-
China risks debt crises from its overreliance on investment-driven growth, now 300% of GDP. But stimulus is too little to shift equilibrium.
-
China's strategy likely leads to a global trade war as the world protects itself. This could take years to play out but ends badly for China.