Fallacy of the ‘China Collapse’ theory

Justin Yifu Lin

China Economic Journal, 2025, vol. 18, issue 1, 3-20

Abstract: Despite China’s incredible economic performance never achieved before in human history, the cacophony of ‘China Collapse’ theories continues to bombard our ears and overwhelm our senses. Especially recently, due to the decline of China’s economic growth since 2013 and the lower-than-expected post-pandemic recovery in 2023, the wall-to-wall ’China Collapse“ campaign is resurging in the West. However, those views, though seemingly sensible, lack credibility, which will bring misleading implications. By rebutting narratives of the ”China Collapse’ theory, I point out that (1) the ‘advancement of the state sector and retreat of the private sector’ is the result rather than the cause of the economic downturn; (2) aging will not necessarily draw down growth rate; (3) ‘Balance sheet recession’ will not happen in China since it is still in the process of industry upgrading and holds the most investment opportunities in the world.

Date: 2025
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DOI: 10.1080/17538963.2024.2437864

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