Those concerns got louder during the repeal of the Glass-Steagall Act in 1999 [2], as that removed depression-era regulations that kept banks from a lot of financial speculation.
But this all didn't really blow up until the financial crisis of 2007-8. [3] Financial instruments with long time horizons (e.g., mortgages and long-term loans to governments) can be dangerous a long time before the truth comes out. And large organizations like banks and governments may end up exacerbating the problem by smoothing over what they think of as small problems but are really the canaries in the coal mine for major systemic issues.
Closer to home, we could look at Theranos, which took a full 15 years to go from founding to criminal charges despite never really working. Enron and Worldcom are two other good examples where booming markets covered up all manner of sins for years before the music stopped.
[1] https://www.nytimes.com/1994/12/08/business/orange-county-s-...
[2] https://en.wikipedia.org/wiki/Aftermath_of_the_repeal_of_the...
[3] https://en.wikipedia.org/wiki/Financial_crisis_of_2007%E2%80...
The real collapse didn't occur for several years.
They were wrong on the timing, which is fairly common, while being right about the cause and ultimate outcome.
China of 10 or 15 years ago is not China of today, as it pertains to their debt situation. Going from a 130% debt to GDP ratio, to 300% (or higher if you count shadow debt), puts you in a fiscal place that few nations have ever navigated successfully. Now China is reversing course on deleveraging and proceeding to leverage up further, likely making the situation worse.
300% debt to GDP may be sustainable with 8% real growth. How about at 5.5% growth? 4.8%? How about 450% debt to GDP, at 5.5% GDP growth? There are limits to this sort of approach to propping up an economy with very large sums of debt and slowing growth. How much does their growth drop off if they can no longer continue to expand the debt so dramatically? And when that happens, can they still service their debts well? The question is exactly where the limits are and what the consequences will be as they're hit. That varies from country to country, depending on the unique circumstances, and depending on the type of debt. What you can be certain about with China, and what it's doing, is that it's not good. Even if that immense pile of total debt - which continues to grow rapidly - doesn't implode their economy, it is very likely to stagnate it at a minimum by robbing the economy of the growth capital it needs (diverting it to rather incredible debt interest payment sums, as is the case now). As that debt goes higher, more and more of each incremental dollar of GDP growth is going to maintain it.
While all of that is happening: China has large pension funding problems, very high real corporate tax rates that are smothering its economy, a weak social safety net, a shrinking small business market and expanding government-corporate sector that is far less efficient than the private sector, a rapidly aging demographics problem, contracting labor force, and soon to be contracting population. Now juggle all of that with their debt load, before they get rich/affluent at the median, and before they even build out a meaningful social safety net for the bottom billion people (social safety nets & welfare policies being the usual primary cause of large debt accumulation in the developed world).
Should the CCP decide to reset all debt, they could likely get away with it through measures that insure a lack of debt collection doesn't cause a dominoeing effect.
A one-party "democratic republic" is not a democratic republic.
A country that's doing what China is doing in Xinjiang to the Uighurs isn't a country with a bill of rights that matters.
I'll agree that China is not at the moment particularly communist/marxist. That doesn't make them a democracy.
They're communist.
You seem to be unaware of the role of the Communist Party in Chinese government.
https://en.wikipedia.org/wiki/Communist_Party_of_China
Xi is currently consolidating power into more of a straight dictatorship, though. It's pretty interesting to watch.
The primary debt problem in the US, is the public debt of the US Government. The US Govt can decide to 'forget' their debt, they're going to use inflation to do it over time (that is, quantitative easing, debt monetization). US Government debt will increasingly be held internally as a percentage, as it expands by $700b-$1t per year. There are no external buyers for that much debt and they can't afford the high interest rates it will take to attract that much private capital over time (it'd rapidly swamp the US budget), only the Fed will be able to keep up with it. They'll follow the Japan recipe, holding rates artificially low perpetually to keep debt cheap, while debasing the dollar to stealth default on the debt in order to reduce its real value vs the economy and government finances. That's how Western nations forget their debts.
This is absolutely false. The US has been in debt it's entire existence. Debt is a problem for the private sector, not the public sector. Why? Because the debt the US is denominated in dollars, which it has the sole ability to create. Imagine a household with the same power, let's say you "adventured" are able to print "adventure dollars". When you give out these adventure dollars, you run a deficit of X adventure dollars. You are now X dollars in "debt". That's exactly how public debt is measured. It's silly to think the US could not pay any debt denominated in dollars.
Yes, he could do that, but the problem is that state-capitalist economies do poorly in the modern world. That's why Dung Xiaoping abandoned Maoism and turned to the free market in the first place.
By the way, the term "state capitalism" was invented to communicate that the economy in the Soviet Union was radically different from either a free market economy or the anarchistic, democratic socialist economy that the Bolscheviks had promised.