Is China’s Economy Heading for Collapse?

(RepublicanDaily.org) – Tensions between the U.S. and China are at the highest they have been in recent years, given recent moves by Washington to contain several potential threats to national security from Chinese technology. But, China has lashed out at U.S. in response more strongly than it typically does, likely due to worries that its economy is in dire straits.

A combination of issues related to property market woes, healthcare struggles, and falling prices and deflation have led some to see parallels between the state China’s economy is in right now to the collapse of the Soviet Union in the 1980s, or Japan’s economic slowdown in the early 1990s.

In the property sector, Evergrande, one of the largest real estate companies in China, recently filed for bankruptcy protection in the U.S. as it attempts to restructure in the face of the chaos left behind by the collapse of China’s property bubble. The once king of property development in China was discovered to have more than $300 billion in liabilities, and similar problems faced by other real estate companies in China have seen a spate on incomplete housing projects, which have resulted in mortgage boycotts and protests in the country.

There have also been concerns over the country’s healthcare industry, which has recently seen the loss of as much as $27.4 billion worth of value in stocks in A-list healthcare companies. The country is in the middle of a crackdown on corruption within the healthcare system, as reports say at least 177 officials are being put under the government’s microscope over alleged kickbacks and other irregularities done in tandem with players in the China’s pharmaceutical sector.

China was hoping to gain back some traction in terms of growth, but the opposite has happened, with China experiencing GDP growth of 4%, which is meager compared to the exponential growth the country has seen in previous years. Unemployment is also high – so high, in fact that the Chinese government has stopped releasing official figures – with the last unemployment numbers showing an increase to 5.3% overall. But more striking was unemployment for youths 16 to 24 years of age, which soared to more than 20%.