Over the past fifteen years, China accounted for approximately 35% of global nominal GDP growth, surpassing the United States’ contribution of 27%. Since Deng Xiaoping took over the reins of the CCP in 1978, China has been the global growth engine, fueled by infrastructure, manufacturing and Real Estate development, under a closely controlled central planning. Looking into the near future however, growth prospects for China don’t look so bright. In fact 2025 might be the last year China grows at or above 5%, since it needs to restructure the Real Estate sector and cope with the tariffs the new U.S. administration will impose on its products and services. But as you can see in the table below, other Asian economies, highly dependent in the past on China for its growth, are expected to outgrow it, in some instances like Philippines and India, by a 2X+ factor. Can the world ex-China grow enough to cope with its debt? Can India take China’s place as the growth engine? What are the global implications of an unheard Chinese recession?
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