When China abandoned its lockdown-heavy “COVID zero” policy late last year, it was widely predicted that the nation’s economy would boom as trade and travel returned to normal. But in the months since, consumer spending has been anemic, the property market—which has been labeled a “ticking time bomb”—continues to struggle after years of overbuilding, and government officials are struggling to cope with $23 trillion in unmanageable local government debt as well as rising youth unemployment.
Now, some economists fear China is headed for an insidious type of recession that will keep its economic growth subdued for years to come. “China is entering a balance-sheet recession…people are no longer borrowing money,” Richard Koo, chief economist at the Nomura Research Institute, the research arm of Japan’s biggest investment bank and brokerage, told Bloomberg Friday.
