I would like to ask you, "The person who predicted the next big crisis wrote an article in 2006 10, clearly pointing out the economic crisis in 2008 and talking about the future by the way."

After 20 13, China will encounter a hard landing.

On April 2 1, the Financial Times published the title "Prosperity and Destruction: Is Nouriel Roubini's View of China Right? The article, the following is the main content:

Perhaps it is not surprising that Nouriel Roubini (also known as "Dr. Doom") views China and its recent economic development model. Based on the experience of two recent trips to China, the good doctor made a terrible prediction.

So, the man who became famous for predicting the collapse of the American real estate market and the subsequent global credit crisis: will he win the prophet award for the second time?

The following is his first opinion on China published in the world newspaper syndicate.

"China is very active in investing in tangible assets, infrastructure and real estate. In the eyes of a visitor, all this is obvious: look at those luxurious but empty airports and bullet trains, useless roads, thousands of super-large new office buildings of central and provincial governments, abandoned ghost towns and brand-new aluminum smelters closed to prevent the global aluminum price from plummeting. "

"In the end, it is very likely that after 20 13, China will encounter a hard landing. From past experience, all over-investment-including East Asia in the 1990s-will eventually lead to financial crisis or long-term slow economic growth. "

Roubini bravely predicted when Greater China would collapse. In the past 20 years, many people have tried the same thing and failed miserably. He was clever enough not to specify the exact time of death. If we interpret the above comments in other words, they are actually saying that he does not think that China will encounter a hard landing in the next two years.

Some people object to his pessimistic analysis. They pointed out that China has carried out large-scale construction and over-investment for more than 10 years. Every time there seems to be too much investment or infrastructure, the economic growth rate will catch up and idle capacity will disappear. After all, there are many people in China.

Others may say that the poor quality of construction projects means that these old infrastructures must be demolished and rebuilt after ten or twenty years.

But Roubini may be right. He believes that China's obsession with over-investment will eventually lead to huge waste and a sharp slowdown in future growth. His views are very convincing.

"No country can be efficient enough to reinvest half of its GDP in new capital goods. In the end, it will not face huge overcapacity and a large number of non-performing assets. "

Hard landing in China: the risk increases to 40% after 20 13.

It is considered that China's economic growth rate below 8% is a "hard landing"

"The possibility of a hard landing in China this year and next is very low, but after 20 13, the risk of a hard landing will increase." Yesterday, Nouriel Roubini, a famous American economist and "Dr. Doom", once again threw out the argument of "hard landing" of China's economy in Shanghai.

Roubini said in the "SAIF·CAFR Financial Masters Lecture Hall" with the theme of "Global China: Economic Risks and Investment Strategies" that if China does not adjust its economic structure, non-performing loans and public debts will lead to economic slowdown in the future, and the possibility of "hard landing" will increase to 40% after 20 13.

This is not the first time Roubini has criticized China's economy. In April this year, Roubini wrote an article expressing similar views. Roubini was called "Dr. Doom" by The New York Times because he successfully predicted the financial crisis two years later in 2006.

Public debt is close to 80% of GDP.

"No economy can have the productivity of China and spend half of GDP on reinvestment and new capital investment every year." Roubini believes that China's economic growth depends on exports, huge investment in fixed assets, high savings rate and low consumption, but this model is not sustainable.

Roubini pointed out that the end of the above-mentioned model will lead to three major problems-including the increasing non-performing loans of banks, huge public debt and overcapacity in many industries, which will lead to a "hard landing" of China's economy.

Although there is no uniform definition of "hard landing" in the industry, Roubini believes that for China, the economic growth rate below 8% is a "hard landing", and "maintaining it at 5% to 6% for more than one year is a hard landing, but the probability of China in the next two years is very low."

Roubini said that it is worth discussing whether China can avoid a "hard landing" through economic restructuring and more consumption. "I think it is necessary to adopt a series of economic policies to shift from investment in fixed assets to consumption. If this transfer does not happen, I am worried that one day there will be no projects to invest. "

Roubini said that according to his research, his colleagues and other scholars, China's public debt, such as provincial debt, may reach 20% to 27% of GDP, while the central government's debt is only 17% of GDP. "There are still many hidden debts, and the so-called public debts may add up to nearly 80%."

Wang Zhihao, research director of Standard Chartered Bank in Greater China, holds a similar view. Wang Zhihao previously estimated that by the end of last year, the total public debt of the central and local governments in China was about 28 trillion yuan, accounting for about 70% of GDP.

According to the data released by the National Audit Office at the end of June, the total government debt of provinces, cities and counties in China is 10.7 trillion yuan, equivalent to 27% of GDP in 20 10.

"I agree that China still has financial resources, but all the resources at present actually imply some economic structural problems, which will eventually lead to economic recession, so China must rebalance its economy to avoid a hard landing." Roubini said.

Roubini's "Cup Theory"

Roubini, who has always been pessimistic about the global economy, described the global economy as "half a glass of water" and "half full of air". An optimistic economist can say that the glass is half full, but what Roubini sees is still half empty.

According to Roubini, there are eight hidden dangers in the global economy, including the economic risks in China. First, the development situation of developed countries is insufficient, not a V-shaped recovery. Secondly, sovereign debt risk, especially in the peripheral countries of the euro zone, the growth of the whole euro zone is slow. In addition, the uncertain economic growth prospects of the United States and the situation in the Middle East are also plaguing the global economy.

"The rapid growth of emerging economies is also a big problem, which is also one of their weaknesses." Roubini said that inflation exists in many emerging economies, and credit growth is too fast, leading to asset bubbles. "Many policies in emerging markets have led to asset bubbles and the expansion of products and services."

For developed countries, inflation is not the main problem, "but the commodity market." These countries cannot raise commodity prices significantly. In the case of high unemployment rate and weak labor market, the inflationary pressure in developed countries is not too great, and its real estate market is seriously deflationary. "

Roubini also warned that there are no effective policy tools at present. "The problem we face is that policy tools are far from enough. In terms of finance, every developed country has experienced austerity, especially the euro zone. " Roubini said that what we have to face is the tightening of fiscal and monetary policies, which has brought about economic weakness. "Economic weakness will lead to fewer and fewer policy tools available to us."

"We are currently in an era of too much liquidity, and there are still many uncertainties. These' black swan' effects, as well as the impact of the earthquake in Japan, the European debt crisis and the US financial crisis, may cause excessive debt leverage. " Roubini said. (Note: 1697, explorers discovered black swans in Australia, and people realized that the previous conclusion was one-sided-not all swans are white. Therefore, the black swan event refers to an unpredictable major event. )