By Michael Roberts
While the leaders ‘talked turkey,’ the economic reality is that U.S. efforts to strangle the Chinese economy are not working. Western ‘experts’ continue their never-ending message that China is close to a debt collapse. If this were really so, then Biden and American capital would have nothing to worry about – but they do worry, and rightly so.
In previous posts, I have argued that it was a big mistake by the Chinese CP leaders to adopt the Western capitalist model for urban development. But this does not mean China is about to have a deflationary crash. China’s net debt to GDP ratio (debt burden) is only 12% of the average in the G7 economies. The state holds huge financial assets, so it can easily manage this property slump.