XI’S GOTTA HAVE IT: China’s Economy Is Burdened by Years of Excess. Here’s How Bad It Really Is.

China’s property meltdown has since 2021 destroyed around $18 trillion of Chinese household wealth, according to an estimate by Barclays, eclipsing the losses suffered by Americans in the financial crash of 2008-09. That hit, along with the trauma of Beijing’s heavy-handed response to the Covid-19 pandemic, helps explain why Chinese consumers aren’t spending freely.

China’s property meltdown has since 2021 destroyed around $18 trillion of Chinese household wealth, according to an estimate by Barclays, eclipsing the losses suffered by Americans in the financial crash of 2008-09. That hit, along with the trauma of Beijing’s heavy-handed response to the Covid-19 pandemic, helps explain why Chinese consumers aren’t spending freely.

China is also facing demographic headwinds that will make it harder to restore its economic vigor. China’s working-age population is shrinking, reversing the demographic dividend that powered its economic ascent.

China’s economy has for decades been powered by heady levels of investment. At first, that yielded modern infrastructure and propelled the expansion of China’s manufacturing engine and its megacities. But sticking with that strategy year after year has meant China today is beset by colossal debts, unneeded apartments and industrial overcapacity.

Instead of allowing the economy to undergo a painful but necessary restructuring, Xi is doubling down on real estate and industrial investment while attempting to export China’s way back to growth — in a global economy already flooded with inexpensive Chinese goods.

It’s impossible to say whether Xi lacks the political capital to endure restructuring or if he’s an unreconstructed Maoist, but the results are the same either way.