China is currently in a growth trap where expectations that growth will continue drive investment and growth, but once businesses conclude growth won't be robust, they reduce investment, which then causes growth to slow further, creating a self-reinforcing negative cycle that is difficult to escape.
causalpending
Speaker
Martin WolfEvidence Quote
“a lot of the growth in a system like this depends on the expectation that growth will continue as soon as businessmen conclude that actually the economy isn't going to grow very much then they conclude well we shouldn't invest so much and if they decide that they're not going to invest so much then the growth will slow [18:09]”
Created: 8/12/2026, 6:24:34 PM
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