China's own economic miracle just got declared broken, by one of the people who studies it closest.
Logan Wright of Rhodium Group titled his new book "Broken China." His argument, in his own words: "this credit-dependent, investment-driven growth model has basically come to an end." He says China built one of the largest credit expansions in a century, and now that system is running out of road.
Here's the scale. Between 2008 and 2016, Chinese banks added new lending equal to roughly a third of global GDP. Much of it went into projects that never generated enough return to pay the loans back. Property once made up 20-25% of GDP. New housing starts have fallen nearly 80% since the peak, sales are down more than 60%, and buyers no longer expect prices to rise.
Wright's conclusion matters because of what it challenges. Beijing's message to the world has been that its rise is unstoppable. He says that story doesn't hold anymore, that China now faces a genuinely more constrained future.
New strategic industries like EVs and robotics won't fix this either, he argues. They're capital-heavy, not job-heavy, and don't solve the deeper problem: Chinese households don't consume enough, and the fix (shifting taxes, writing down bad loans) is politically hard to do.
He also says the US now has more economic leverage over China than it has in years, not because of chip bans, but because China can't keep growing without selling into markets abroad.
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