China's uncertain future

Today the world, including the Philippines, fears that China will become the main superpower in the future.

- ELFREN S. CRUZ

This fear has been exacerbated by the recent developments caused by the Trump presidency. There are credible predictions that Trump’s isolationist policy – which includes imposing tariffs on his neighbors, China and potentially the European Union – will cause inflation and potentially a recession in the United States.

However, recent news from China reveal that this country is also undergoing serious difficulties. China’s economic miracle was started by the political and economic reforms of Deng Xiaoping. It reached its peak in 2007. Its present leader Xi Jinping has reversed many of the reforms initiated by Deng Xiaoping. Even worse, Xi seems to be dreaming of becoming another Mao Zedong.

During the past five years, there has been tremendous economic volatility in China. The real estate market and urban development have been the core drivers of China’s growth in the past two decades. These two drivers have been experiencing major corrections. In August 2024, the International Monetary Fund estimated that roughly 50 percent of Chinese property developers are on the brink of insolvency. One major cause of this persistent weakness in the real estate industry has been the decline in housing prices, which have been falling at a faster pace since 2015.