Subtitles section Play video Print subtitles China is the world’s most populous country, and its economy is second only to the United States’. But despite these indicators of a prosperous future, China has several looming problems ahead: a stagnate economy, a shrinking workforce, and a growing elderly population. So is the “Sleeping Giant” on the verge of a dangerous economic collapse? What’s at stake for China? Since the 1970s, China has instituted a “one-child” only policy. This was to help cope with poverty problems caused by overpopulation. However, a side effect is that today there are fewer young people to take care of a massive aging generation. In Shanghai, one expert believes that in five years, a third of the city’s residents will be over the age of 59. With a smaller working age population, the workforce is slowly shrinking. China’s economy has also suffered in recent years. In 2008, their part in the global recession was coupled with a massive earthquake. In response to those crises, the government instituted federal work programs, and housing projects. Those stimulated growth, but also came with their own problems. Today the surplus of housing is causing property prices to drop, and the housing market is, quote, “comatose”. This is especially dangerous as some economists estimate that China’s real estate industry accounts for about 20% of their national GDP. Additionally, the Chinese banking system is in need of some policy changes, and is often secretive. According to the International Monetary Fund, “off-balance sheet activities” and “informal credit markets” have made China’s financial sector vulnerable. Their report called for increased oversight and transparency into the “shadow banking” world. The Brookings Institution reported that in 2013, shadow banking accounted for around 43% of China’s GDP. The country’s growth has slowed to its weakest point in 24 years - 7.4% in 2014. Consumer confidence is weak, and municipal debts remain “dangerously high”, according to experts. Currently, one American consulting firm estimated that China’s debt to GDP ratio is at 282%. Many agree that China is in danger of a major economic setback. Economists note that, in order for their recovery to be less painful, their economic woes must be addressed as soon as possible. Despite their status as a wealthy superpower, China will face major unavoidable money problems in the coming years. China isn’t the only country with a lot of debt. To learn about the situation in the United States, take a look at our video here. Thanks for watching TestTube News, please subscribe now and we will see you again next time.
B1 china banking housing economy gdp shrinking Is China's Economy On The Verge Of Collapse? 497 31 Jack posted on 2015/07/13 More Share Save Report Video vocabulary