Could Chinese Debt Cause The Next Global Financial Crisis?
Published on Sep 19, 2021
The Chinese economy has a $52 TRILLION bubble in it. But do we need to worry about Chinese debt? Will it cause the next global finance crisis?
The Chinese economy has gone through one of the most remarkable periods of economic growth in history. It has pulled literally millions of people out of poverty. But that's now at risk. Debt levels in the Chinese economy have grown and grown.
Chinese real estate is becoming as expensive as the developed world. Why? Because where else can Chinese people put their money. The Chinese economy has boomed, but restrictions are still very much there. Property is about the only thing to invest in and how do people do that? They load up on debt.
Americans did this ahead of the 2008 Global Financial Crisis. The clue is in the name, it had global consequences. In this video, we go through the reasons why people are worried about Chinese debt causing the next global financial crisis.
If you're an emerging economy, or a developed one which trades a lot with China, you may be in trouble. If the Chinese economy becomes a bit ropey, those imports of Australian and New Zealand wine will fall. Supply chains around the world might also be disrupted if the Chinese debt bubble bursts, sending the economy into a recession.
Hopefully it doesn't come to that, but it is no surprise that China's property market is so hot. Demand for Chinese real estate has grown dramatically with almost everyone in an urban area now owning a home. In some instances, they own multiple which they leave empty because being a landlord in China is too much hassle.
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