The cause and effects of China’s slow-motion crash

In September 2024, Xi Jinping visited Gansu province and saw local governments “basically running on fumes”—civil servants unpaid, social services slashed. He returned to Beijing and signaled that China should “try very diligently to hit the growth target,” then ordered a surprise stimulus package. The problem, as Logan Wright, partner at Rhodian Group and author of Broken China, explains to host Peter Towers on The Big View, is that official GDP data at the time showed China right on target. Either Xi and his officials do not understand their own economy, or the data is wrong. Wright argues for the latter, and his diagnosis goes deeper than a single bad quarter: China is living through the aftermath of the largest credit boom and bust in at least a century, and its leadership has lost the policy tools to steer the economy.

The Largest Credit Boom and Bust in a Century