On The Brink of Economic Collapse: How China’s Fall Will Affect the World

The comments below are an edited and abridged synopsis of an article by Mary Villareal

Chinese mega-developer Evergrande Group is making waves as it defaults on payments and shares drop by 90%. The company, which is embedded across China’s financial system, may force developers to take over some of the projects to ensure that homes are delivered to their buyers.

On the Brink of Economic Collapse - BullionBuzz - Nick's Top Six
Illustration of the United States Capitol Building at the edge of a cliff.

If this continues, an economic global collapse will ensue.

According to Jimmy Chang, chief investment officer at the Rockefeller Global Family Office, the company has $300 billion in outstanding debt. If this matter is not resolved, it will need some deep-pocketed state-owned enterprises to take over.

Should China’s economy continue to stumble, it is expected that the global economy will go down with it. This is why President Xi Jinping must strike a balance between eliminating China’s debt and maintaining consumer confidence. One wrong move and the country could find itself in both economic and political chaos.

China’s economy has been described by the World Bank as “high growth based on resource-intensive manufacturing, exports, and low-paid labour.” It may have reached its limit, leading to economic, social and environmental imbalances.

Up for discussion: China’s stumbling economic power, and will China close its economy.

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