The U.S. economy continues to soar while American politics craters

The troubles of a company that nobody had ever heard of now have people worried about another global economic crisis. Evergrande is a property developer in China with the dubious distinction of being the world’s most indebted real estate company, with outstanding loans of more than $300 billion. For the moment, at least, it appears unlikely that the firm’s travails will upend the global economy. But its crisis highlights a crucial fragility in China’s economy. China’s private debt (money owed by households and corporations) is more than 260 percent of the country’s gross domestic product, far and away the highest in the world for any developing nation.

China’s fundamental growth trajectory is slowing. Its export-driven model has become much harder to sustain as wages have risen, making it less competitive with other countries. Meanwhile, domestic spending is not growing fast enough to replace the export boom. The government’s assault on the technology sector will probably slow down the previously explosive growth in that area.

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