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How Much Will China’s Growth Stumble in 2021?

Summary:
Eddie_T2 daysFood for thought on China. Just looking at the long term trend.....GDP growth peaked in 2007 and it’s been in a long term slowing trend ever since, just a couple of new peaks.....recovery after 2008 dip....now a new and similar pattern showing up as new post-COVID recovery peak. That’s stimulus, not real growth. The decline is tapering, but it’s been close to .5%.year for years coming into the pandemic. The population pyramid in China looks almost as bad as Western Europe. Here’s China. Western Europe Japan Hint: Those all look pretty sucky for the future. Here’s China in 1980, for comparison. Fairly dramatically different, no? I think these debt to GDP numbers are probably low....but they’re 3X US levels even by these conservative estimates. Did somebody say

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Eddie_T

Food for thought on China.

Just looking at the long term trend.....GDP growth peaked in 2007 and it’s been in a long term slowing trend ever since, just a couple of new peaks.....recovery after 2008 dip....now a new and similar pattern showing up as new post-COVID recovery peak.

That’s stimulus, not real growth. The decline is tapering, but it’s been close to .5%.year for years coming into the pandemic.

How Much Will China's Growth Stumble in 2021?

The population pyramid in China looks almost as bad as Western Europe. Here’s China.

Western Europe

Japan

Hint: Those all look pretty sucky for the future.

Here’s China in 1980, for comparison. Fairly dramatically different, no?

I think these debt to GDP numbers are probably low....but they’re 3X US levels even by these conservative estimates.

Did somebody say something about US junk bonds being in trouble?

China is trying to get out of the hole by putting Africa in debt slavery for resources. Here’s an interesting chart.

Yes, Djibouti’s debt to China is 100% of GDP.

How Much Will China's Growth Stumble in 2021?

From the same article.

"The authors also warn that “[d]ebt sustainability metrics are poorer than generally perceived, especially so in about two dozen developing countries that borrowed heavily from China during the boom decade of 2003-2013,” and that “hidden overseas debts pose serious challenges for country risk analysis and bond pricing.”

I think that’s banker speak for “some of this funny money isn’t going to be repaid”

Mike Shedlock
Mike Shedlock (Mish) is a registered investment advisor representative for SitkaPacific Capital Management (http://www.sitkapacific.com/). Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.

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