China's Economy is Broken | Logan Wright

China’s economic miracle has shattered, as the financial system that once fueled rapid growth now constrains development through inefficient capital allocation and debt-laden state-owned enterprises. Logan Wright, partner at Rhodium Group, argues that the country’s reliance on massive credit expansion—which added a third of global GDP to bank assets in eight years—has reached its limit, resulting in a structural slowdown rather than a temporary dip. The collapse of the property sector, highlighted by the 2021 Evergrande default, exposed the fragility of a model that prioritizes state-led investment over domestic consumption. While Beijing attempts to pivot toward advanced manufacturing and export dominance to maintain national power, these sectors remain too small to offset the broader economic decay. Consequently, China faces a future of permanently suppressed growth, forcing policymakers to navigate a landscape where traditional stimulus tools are increasingly ineffective.