UNEXPECTEDLY: China’s economy is way more screwed than anyone thought.

Entering 2023, the relentless drumbeat of Wall Street consensus was pounding out one consistent rhythm: China is back. After years of lockdowns and suppressed output, economists and investors cheered the end of Beijing’s zero-COVID policy and the economic boom that was sure to follow. The colossus-in-waiting that is the Chinese consumer was about to roam freely, analysts said. This was great news for the whole world — everyone would benefit from the globe’s second-largest economy getting healthy.

But six months into the year, Wall Street’s dreams for the country are turning into a nightmare.

Far from an economic explosion, China’s recovery from COVID has been weak. Industrial production has disappointed. Trade — both imports and exports — has slowed markedly. There is debt everywhere, especially in property development, which makes up 30% of the economy. Trading partners are upset for a litany of reasons, from human-rights abuses to concerns about the government’s increasing role in the country’s commerce. The private sector — which was expected to drive most of China’s bounceback — is running scared.

Flashback to November of 2019: How to Conduct Business with Chinese Companies That See a Dark Future.

And to December of 2021: China Is Becoming the Soviet Union.