China’s Credit-Fueled Growth Model Now Constrains Its Future
Rhodium Group’s Logan Wright argues that China’s financial system, once the engine of its economic rise, now locks capital into unproductive state firms and investment while starving households and private businesses of the income and credit needed for a new growth model. In a discussion with Elizabeth Economy, he says Xi Jinping’s centralization has made it harder to absorb losses or reverse policy, leaving Beijing reliant on exports as domestic consumption and employment weaken. A genuine shift, Wright contends, would require conspicuous fiscal transfers, financial restructuring and a willingness to accept slower growth.
Hoover Institution·Sep 10, 2026·14 min read
