The Chinese economy in peril for 100 years!

The sky darkens ominously over the Middle Kingdom. Indeed, according to the alarming forecasts by renowned investor Ray Dalio, all the ingredients are now in place for an economic storm of rare intensity to hit China. Even worse, this turmoil could have devastating repercussions for the entire century to come. It’s an apocalyptic scenario that the billionaire describes candidly.

The Deadly Economic Spiral of Debt

At the heart of the impending explosion lies the unsustainable problem of Chinese debt. Ray Dalio believes that it has indeed reached levels that are far too high for corporations, households, and local governments alike. A combustible mix that dangerously weighs down the balance sheets of the Middle Kingdom.

But the worst is yet to come. For this explosive situation is accompanied by a vicious cycle in which each element exacerbates the previous one. On the one hand, the dramatic plunge in real estate and stock prices is drastically impoverishing the Chinese, eroding their confidence and consumption. On the other hand, this recession inevitably leads to rising unemployment and downward pressure on wages. A devastating vicious cycle for the economy.

When Demographics Multiply the Threat   

But that’s not all. Other cataclysms of a demographic nature also seem to be looming to finish off the Chinese economic edifice. With the problem of the rapidly aging population due to the former one-child policy, the Middle Kingdom faces a programmed collapse of its working population. A looming disaster for the country’s vital forces.

In addition, the ruthless rivalry between the United States and China causes many Western multinationals to leave Chinese soil. A hemorrhagic loss of foreign direct investments that adds to a cumulative heap of calamities. At the same time, other low-cost countries like India or Vietnam are emerging as increasingly attractive alternatives, hastening the inevitable economic decline of China.

Ultimately, China finds itself indeed facing an economic onslaught of rarely seen power. Between the abyssal debt, impoverishment of households, rampant unemployment, demographic decline, and the flight of foreign investors, all the destructive elements appear to be definitively in place. Even more so (or worse), according to Ray Dalio, this economic tsunami is only in its early stages. The billionaire warns that this sequence of plagues is just an initial phase before the coups de grâce of climate change and the upcoming trade war with the United States.