China's Economic Miracle: Unveiling the Mirage

China's failure to implement major economic reforms has left the country reliant on outdated policies, leading to a massive debt pile and industrial overcapacity. Analysts warn that China is at risk of a financial or economic crisis that could have significant social and political costs. The options for China include a swift, painful crisis that addresses debt and excess capacity, a gradual wind-down of these issues at the expense of growth, or a consumer-led model with structural reforms. However, the likelihood of actively switching to a new model is low, as previous reform plans have been abandoned due to fears of short-term risks.