Scholar points out 4 major problems of the Chinese economy, 'the content is too explicit', causing a frenzy in the community.

Chinese economist Fu Peng's recent speech at HSBC has gone viral on social media due to its controversial content. Fu Peng analyzed various challenges facing the Chinese economy, as well as the economic conditions and prospects of Japan and the United States. This article summarizes Fu Peng's main points for readers. Global economic structure undergoing significant changes. Fu Peng first stated that to understand the current logic of the world economy, one must recognize the significant cyclical changes that have emerged in the global economy over the past 40 years. He pointed out that since Trump's first election victory in 2016, the structural changes in the global economy have become increasingly apparent, namely deglobalization and right-wing trends. Current situation of the Chinese economy. 1. Sudden decrease in middle-class consumption in China. Fu Peng first pointed out that in current Chinese society, a significant change is the increasingly difficult situation of the middle class. He stated that since 2019, the effective demand in the residential sector has begun to decline, especially the consumption capacity of the middle class, which has been greatly affected: As economic pressures increase, more and more middle-class individuals are starting to reduce their daily expenses, with consumption behavior gradually downgrading, such as choosing cheaper goods and services for the same demand compared to before. 2. China's aging population issue. Regarding China's population issue, Fu Peng pointed out that the negative impact of China's aging problem is becoming increasingly evident. At the same time, this impact is in a vicious cycle: Young people's reluctance to have children has become a key factor severely affecting economic development. The decline in birth rates is followed by a decrease in domestic demand, which poses a huge challenge to China's consumption-driven economic model. On the other hand, the aging trend has also led to a decrease in the labor force population, further exacerbating economic pressures. Fu Peng added that to solve this problem, it may no longer be possible to rely solely on China's economic rise. Because we can see that China's economic growth has slowed down. In the past few decades of rapid development, China did experience an amazing economic rise phenomenon. However, with the current economic slowdown, addressing China's economic problems may require solutions from wealth distribution, but this is likely to be a challenge. 3. China's real estate market. Similarly, China's real estate market has entered a phase of slowing growth, and the previous method of stimulating the real estate market by increasing leverage no longer works. Previously, China's real estate market mainly relied on the purchasing power brought by young people, but with the disappearance of the demographic dividend, young people's willingness to buy has also started to decline. Fu Peng pointed out that the deeper reason behind this phenomenon is that the leverage ratio of the residential sector in China has reached its limit. Previously, married young people in China could purchase properties through support from both parents and their own loans, known as emptying two generations, six wallets to buy a house. However, the current economic situation is no longer sufficient to support this model. As a result, the real estate industry that contributed to China's economic golden age can no longer be considered a supporting industry for China's economic development. 4. China's government debt. Lastly, Fu Peng mentioned China's government debt issue. He pointed out that in the past, Chinese local governments used fiscal deficit policies to invest in infrastructure to promote economic growth. However, currently, the consumption capacity of the residential sector in China is no longer sufficient to support the government's fiscal revenue. When the government's policy space is constrained, leveraging is also ineffective. Furthermore, the debt accumulated by the government in the past still needs to be addressed, and the solution once again points to taxes and other means for the Chinese residential sector. Revival of the Japanese economy. In Asia, Fu Peng believes that Japan's economy seems to be showing signs of recovery. Firstly, Japan's aging issue is ahead of China, and because of this, the wealth in Japanese society may soon undergo a new round of redistribution. Secondly, Warren Buffet has already targeted the Japanese capital market for investment, indicating that Buffet also believes that wealth redistribution in Japan is about to begin. As a participant, he can always get a share. Fu Peng jokingly said: I may send my youngest son to Japan next year. I've made it clear to him that I don't need him to learn artificial intelligence. You just need to learn Japanese well and if you can get into Keio University, that's great. There are some traditional noble ladies there, preferably with 80 or 90-year-old family members. You just need to lie down and win. When their older generation passes away in a few years, the house, stocks, and savings will be yours, and we will participate in Japan's 40-year wealth redistribution. Buffet participates with money, and we participate with people, but the essence is the same. Long-term challenges facing the U.S. economy include asset bubbles and widening wealth gap. In addition to China and Japan, Fu Peng also analyzed the world's largest economy, the United States. He first pointed out that Trump's election this year marks a new stage for the U.S. economy and politics, as the trends of right-wing and deglobalization will become more pronounced. Fu Peng mentioned that the economic policies Trump may propose after taking office, such as cutting taxes domestically and increasing tariffs internationally, will have profound effects on global trade. On the other hand, Fu Peng also pointed out that the current monetary easing policy adopted by the Federal Reserve will stimulate economic growth in the short term. However, in the long run, problems such as asset price bubbles and widening wealth gap are still difficult to avoid.