While not getting much attention by the western media, a financial crisis is building in China, which could possibly lead to the collapse of the Chinese economy, and either the end of government rule by the Chinese Communist Party (CCP) or a sudden military adventure by the CCP in an attempt to distract the Chinese people from the financial crisis inside of China.
The Chinese Communist Party came to power by promising the Chinese people a higher standard of living. In order to provide this higher standard and living, and to remain in political power, the CCP opened up its economy to the West in 1978.
China’s GDP in 1978 was $149.5 billion. After China opened its markets to a free economy in 1978, the growth rate of the Chinese economy was nothing short of phenomenal. In 2021, China’s GDP was $17.7 trillion. The main reason for the explosive growth of the Chinese economy was that it’s economy in 1978 was bankrupt, and had no place to go but up.
While China’s economic growth has been impressive, it has relied specifically on “Steady State Growth.” Steady State Growth relies on continuous and increasingly amounts of economic inputs to keep its growth rate. Once the inputs into the economy level off or stagnates, the growth rate suffers, and a decline in the economy is inevitable.
In contrast, western economies are subject to the “Non-Steady State Growth” model by the Solow-Swan economic model. Non-Steady State…
