Why the China Threat Is Overblown | Logan Wright

China’s economy faces structural decline, fundamentally driven by an unprecedented credit expansion that has exhausted the financial system’s capacity to generate growth. Rather than cyclical fluctuations, this stagnation stems from systemic policy choices that prioritized state-directed lending and moral hazard over necessary structural reforms. Official GDP figures significantly obscure the reality on the ground, masking the collapse of the property sector and persistent weakness in domestic demand. Logan Wright, Director of China Macro and Financial Sector Research at the Rhodium Group, highlights how the transition from a reform-oriented path to centralized authoritarian control has fundamentally altered the US-China relationship. The shift from a "flight to risk" to a "flight to quality" among Chinese investors signals a profound loss of confidence in the state’s ability to engineer recoveries, rendering traditional economic management tools increasingly ineffective in the face of long-term stagnation.