World-renowned economist Paul Krugman, a professor at City University of New York, gave a negative outlook on the Chinese economy, which has failed to resolve internal imbalances.
Professor Krugman asserted in his column for the New York Times (NYT) that "China's future will be different from what it has been."
China has become an economic powerhouse through rapid growth in a short period of time, but it cannot be seen that the same situation will continue in the future.
Professor Krugman, who won the Nobel Prize in Economics in 2008, analyzed that the chronic problems of China's macro economy are approaching a critical point.
He diagnosed that there is a serious imbalance in which a minority monopolizes the fruits of China's growth through exports while the people are excluded.
He went on to say that in China, where consumption is a small share of gross domestic product (GDP), it is the real estate bubble that can sustain the domestic economy.
Professor Krugman pointed out that the share of real estate in China's GDP is 29%, twice that of the US real estate market bubble in the 2000s, and argued that such a real estate bubble cannot last.
He also analyzed the decline in the labor force as a negative factor for China's economic growth.
Professor Krugman concluded his column by saying, "If we want to see China become the world's leading economy, we will have to wait a very long time."
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