Avebarna Domingo: O capital no século XXI

Project Syndicate 17-08-2021, por Kenneth Rogoff

https://www.project-syndicate.org/commentary/country-garden-shows-debt-supercycle-comes-to-china-by-kenneth-rogoff-2023-08

While some economists may argue that secular stagnation is to blame for China’s economic slowdown, concerns about sustained slower growth are overblown. If the country falls into a recession, it would constitute the next turn of the debt supercycle that began in the US in 2008 and moved to Europe in 2010.

The 2008 financial crisis in the United States kicked off a debt supercycle, which spread to Europe in 2010 and has recently engulfed many of the world’s low-income and lower-middle-income countries. Could the debt woes of Country Garden, the behemoth Chinese real-estate developer now facing billions of dollars in losses, augur the cycle’s next turn?

The answer remains unclear. While the Chinese authorities have a remarkable track record when it comes to containing economic crises, the challenges posed by a significant growth slowdown, combined with high debt levels – especially for local governments and the property sector – are unprecedented. (..)

2023-08-20