What if China’s exponential growth had come to an end. The suspicion is insinuated by an analysis by the Wall Street Journal which examines the economic model of the Asian giant which, it says, “has broken”.
“For decades, China has fueled its economy investing in factories, skyscrapers and roads. This model kicked off an extraordinary period of growth that lifted it out of poverty and transformed it into a global giant whose exports went around the world” reads the Wall Street Journal “What worked when China was playing catch-up it makes less sense now that the country is drowning in debt and running out of things to build. Economists believe that China is entering an era of much slower growth. More than a period of economic weakness, it could be the end of a long era”, continues the WSJ.
“Some economists – he concludes – fear that the prolonged slowdown could turn into a stagnation similar to that experienced by Japan since the 1990s, when the bursting of the real estate bubble led to years of deflation and limited growth”.