China's Unstable Political Economy

The world has been watching as the Chinese real-estate giant Evergrande flails, and some have been asking whether Beijing will soon have a moment akin to 2008’s collapse of Lehman Brothers in America. Xi Jinping may manage to prevent the burst of the real estate bubble, but China’s economy isn’t heading for more-sustainable growth. Evergrande’s woes are a reminder that China’s political economy under Mr. Xi has become even more unstable, even as Beijing grows more impatient to displace America as the dominant power. Time is not on China’s side.

The global financial crisis that began with the collapse of Lehman Brothers in September 2008 led to a severe liquidity crunch as financial institutions lost faith in the capacity of one another and commercial firms to repay their loans. China’s financial system doesn’t work this way. Loss of faith in the commercial worthiness of other entities isn’t fatal. Instead, banks and other financial institutions unfailingly lend if instructed to do so by political masters.

Disclaimer that the site operates automatically without human intervention, so all articles, news and comments posted on the site are the responsibility of the owners and the website manages them do not bear any moral or legal responsibility for the content of the site.
"All rights reserved for their owners"

Source:" WSJ "

Get the latest news delivered to your inbox

Follow us on social media networks

PREV Gretchen Whitmer's Border War
NEXT Bernie's Surprise Medicare Bill