“The coming collapse of China” has been predicted many times. Indeed, an excellent book of that title was a best-seller back in 2001. Yet the fictitiousness of Chinese economic statistics remains, and the over-leverage in the economy worsens. Like several other successful non-market economies, China has successfully sought rents from other countries through flaws in the global economic system. Thanks to President Trump, that is now changing, and the result for China will not be pretty.

The conventional wisdom is that China is the most successful growth story ever seen, that it will overtake the United States in terms of GDP in the early 2020s and (for some China optimists) that it will overtake the U.S. in terms of GDP per capita by 2050. Certainly, that’s what Xi Jinping is aiming at, with his removal of the limits on his tenure and his attempt to dominate the world’s intellectual property by 2025.

There is just one problem: China’s economic statistics are largely fictitious, and the gap between statistics and reality is growing ever larger. If the statistics are nonsense, then probably the economic power is nonsense as well.

The most egregious flaw in China’s statistics is the savings rate. For decades we have been told that the Chinese people are extraordinary savers, with a savings rate of some 46% of GDP, according to the latest figures, compared with around 6.8% of GDP (Itself a figure recently and dubiously inflated by the Bureau of Economic Analysis) in the United States. Touchingly sentimental pictures are painted of the noble impoverished Chinese, earning one-fiftieth of a Western wage but nevertheless saving nearly half of that pittance, seven times the American rate of saving, because of the country’s notorious lack of social services for the elderly.

If China really had a savings rate of 46%, the economy would look quite different. There would be very little debt in the system; the banks would have very low loans to deposits ratio and low leverage, like banks in the nineteenth century Britain. Consumer debt would be almost non-existent, while the Chinese market would have an enormous variety of saving and investment schemes, to take care of all the accumulated wealth. New company formation would be very high, but “venture capital” would be very scarce, because new companies would be capitalized from the savings of the founders’ relatives and friends. Overall, China might well have a rapid growth rate, but it would be a very contented, stable economy.

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