Though China’s economic growth boom of the past several decades began on a successful premise of economic reforms and modernization, the country’s growth in recent years is increasingly driven by an expanding economic bubble that is similar to the disastrous bubbles experienced by Japan in the late 1980s and the U.S. and Europe during the mid-2000s. China’s bubble economy involves the construction of scores of empty cities, opulent government buildings and infrastructure “megaprojects” to create economic growth as well as a ballooning local government debt bubble and a classic speculative real estate bubble. Even if China were to become the “Next USA” in the long run, it is important to remember that the USA experienced the Great Depression during its ascent as a superpower; China could conceivably experience a Great Depression of its very own when its massive bubble pops.
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