Although there are many economists who think that China is soon going to face a great economic depression which is going to be very similar to- The Great Depression of 1929. But Andy Xie, is one of the loudest voices that speak of this upcoming economic disaster for China.
Andy used to be top economist at the World Bank and Morgan Stanley but he had to leave round around 10 years because a controversial report went public. So Andy now works independently.
Andy believes that the trajectory China is very similar to the one with led to the Great Depression of 1929 and it is not like the Asian currency crisis of 1997 or the United States financial meltdown.
In 2016 China is exactly at that position because 50 percent that is half of the country’s Debt is now propping up the real estate prices and also there is very heavy leverage in the stock market. And what the government is doing? the government is providing cheap financing by allowing speculation, Andy believes.
China is riding a tiger and is scared of a crash and hence it keeps on pumping cash into the economy.