Op-ed: The four big threats to China’s economy

Op-ed: The four big threats to China’s economy

We should all care what happens in China, because it will affect us all. Economic dangers and Chinese President Xi Jinping's responses to them will affect China first and foremost — but trouble in China could become trouble everywhere this year and next. The world is rightly focused on the atrocities being committed by Russia in Ukraine, and China's choice to stand with Russia is straining globalization's links. But China's economic challenges go beyond the war. Threats to China's outlook are rising in four distinct but overlapping areas: at home, in health, in debt, and in a fracturing globe. Real estate Chinese real estate defaults continue. Last year saw record number of defaults among Chinese developers, from Evergrande on down. S&P estimates that between 20 to 40 percent of property developers may face default. , according to a January report from the , a nonpartisan think tank. A stumble in real estate bodes ill for the economy as a whole. Economists have demonstrated that most recessions are either equity- or housing bust-related. Once home prices shake, and start falling, we know the effect of debt on declines in home prices: the former amplifies the latter and can cause a collapse