DANIEL ROARTY
What a difference five years make. Back in 2008, as Beijing welcomed the world to its Olympic games, it seemed as if it was the next great, unstoppable superpower. Analysts were, with full confidence, running straight extrapolations of its 8-10% yearly growth rates decades into the future. From that time until now, China has approximately replicated the entire US commercial banking system, with overall credit jumping from $9 trillion to $23 trillion and creating what some analysts have called a credit bubble “unprecedented in modern world history.” China’s surging GDP rates in the past decades have mainly been fueled by investment-heavy growth. This model, however, is quickly losing its power, and China’s falling GDP growth rates raise an interesting debate on the roles of investment and consumption in China’s development. Continue reading