Entry of China in WTO in 2002 was decisive for both countries . At that time this was a mutual benefit : United States could buy cheap products coming from China at a low price, while China could strengthen its economic development. It was a win win situation for both. Moreover the Chinese were recycling their proceeds from exportations into Treasury bonds. The United states had also found a way to finance their deficit.

Silently and wisely , China began to reconstitute the « New Silk Road » that existed in the antics, meaning a considerable Chinese power in Asia. 

In that extent China has built many infrastructures in Asia, giving considerable amount of money to its neighbors to finance their infrastructure. But it was also a way to increase their dependency to China because China was often lending them the money, sometimes at a high level of interest rates. 

1) Debt

Official Debt for China represent 88% of the GDP, compared to 121 for the US. But be careful the devil is in the details. 88% is the level contracted by the central state, but it does not take into account the private debt. This private debt is estimated to 192% of the GDP, with a total public + private debt around 300% !

2) Deflation

Chinese economy is very competitive and there are always a lot of plants, factories producing at full speed. The Communist Party gives the guidance for certain sectors, and immediately there are a lot of producers. It happened for solar panels, steel, EV, batteries, each time they are in overcapacity. The overcapacity for the Chinese economy is structural, something to have in mind. As there is too much production, prices fall, as well as profitability.

3) Demographics

A lot of analysts always mention demographics as the Achille heel for China. However we are more measured on this subject. Today Chinese population is 1,4 Bln people, same as India. It should decrease, indeed, but there are ways to compensate : the law on number of children has been changed, workforce is educated and can improve its productivity with AI & robotics.