I’m still reading The End of Growth by Richard Heinberg. As a reminder, Heinberg claimed (in 2011) that the world’s economic growth was essentially over, and that in the future any “growth” would be an illusion created by nations fighting over an ever shrinking economic pie. A nation may have a quarter or two of growth, or some prolonged growth as they stole more of the pie from their neighbors, but taken as a whole there was no more economic growth left for the world, largely because Heinberg also thought there was no more oil left for the world. The problem or course is how do you explain China?

It’s a lot easier to brush away claims of “growth” in the Western world, growth has been anemic (although still positive) for the last decade and a half since the Financial Crisis. And although US GDP has growth by 20% or more in that time, most Americans don’t “feel” any different, and so it’s easier for Heinberg to claim (as he does earlier in the book) that this growth is all just an illusion funded by debt. But China is different. Growing their GDP at near double digits for 3 decades straight cannot be easily ignored, and the Chinese middle classes have definitely seen massive changes in their lifestyles as almost anyone today in China can afford more and better stuff than their parents could. Houses are larger, food is more varied, technology is cheaper and easier to get to, China continues to experience massive economic growth, and that’s a difficulty for Heinberg who claims that’s impossible.

The first thing he does is punts, like anyone who doesn’t like the outcomes of China growing economically, Heinberg claims China’s growth is really just a bubble ready to collapse. I’m not about to say that China’s economy is perfect or that it doesn’t contain massive real estate speculation, but I’ve been hearing “China’s economy is a bubble that’s about to collapse” for over a decade now and I’m wondering when people will stop claiming this. A bubble is no longer a bubble is it never pops. China’s economy does experience downturns like everyone else’s, but I haven’t seen any evidence that the whole thing has or will soon collapse, as the world “bubble” would imply.

Heinberg goes on to say that China’s growth is also unsustainable because of falling exports to the West, depleting resources like coal, too many old people with too few young people, and all the other stuff that people have been claiming will implode China any day now. My question for today is: when does this end? If China continues growing at a steady clip, at what point do people update their theories to fit the facts? At what point can we conclude that China’s economy is not a bubble and has the momentum to withstand all the same shocks and stresses as a Western economy? China’s economy has more than doubled since Heinberg wrote his book, and I’m curious to know if he would accept this as disproving his theory or if he’s pushed “the end of growth” date back like so many pushed back “the end of oil.”

Now again, I’m not saying China or its economy is perfect. The Chinese Communist party is a totalitarian nightmare committing genocide in its own boarders and threatening war outside of them, the Chinese economy has vast structural problems that the government papers over, Chinese demographics are not ideal for a growing economy and there is no easy solution to any of these. But I don’t think China is going to collapse any time soon, I don’t think it’s economy is just a bubble, and I think people have been claiming the Chinese Sky is Falling for far too long without ever admitting that they are divorced from the actual facts.