The China Paper Dragon Is Dying – But Still Dangerous

Some weeks ago I wrote in these pages that China Is A Dying Paper Dragon that cannot survive much longer because of its imploding economy and its rapidly aging population. This week newspapers and the internet finally exploded with headlines like: “China Enters the Doom Loop,” “Default of State-Backed Developer Sino-Ocean Signals China’s Economic Crisis,” and “Why is China not rushing to fix its ailing economy?”

The sudden frenzy is exemplified by The Epoch Times publishing China’s July statistics, showing that their economy is collapsing years ahead of my optimistic estimate. Epoch Times journalist Terri Wu wrote: “The world’s second-largest economy has been struggling for months, failing to achieve the post-pandemic boom that many had anticipated. The latest July data release showed exports posting its sharpest year-on-year drop since before the pandemic, and imports at five straight months of decline. Factory-gate prices fell for the 10th consecutive month, while new home sales saw its most significant monthly drop since July 2022,” adding, “China has slid into deflation after months of disappointing exports, manufacturing, home sales, and youth employment results.”