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China’s economy is structurally weaker than it appears and overly dependent on government-subsidized exports.
On the surface, China is on track for another year with a trade surplus topping $1 trillion. Exports surged last month by 24 percent year-over-year, according to data published Friday.
But the domestic economy is showing prolonged weakness. China's growth dropped to 4.3 percent in the second quarter of 2026, the lowest in three years, even according to the government's suspect accounting. Home prices have slumped, and developers and local governments are reeling under piles of debt. Youth unemployment has remained stubbornly around 15 percent.
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| fun fact: China's debt to GDP ratio is about 6 so per capita debt is more than an American despite wages being about 20% of USA levels. Actually probably worse than that since the China's self reported GDP is likely inflated. |
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