Crash of economic crash theory

For a quarter of a century, China's economic crash theory has been a lucrative cottage industry in the West. But there is a reason why certain times favor the doomsayers.

At the turn of the millennium, the economic crash theory was exemplified by Gordon Chang's The Coming Collapse of China (2001). In reality, that's when China became a member of the World Trade Organization and growth soared to double digits until the West's financial crisis in 2008-09. So any investor who took the theory seriously lost big time.

After the crisis, new concerns surfaced. Since China relied on export-led growth and world trade plunged, the crash prophets predicted the collapse of its economy. The truth is, as demand in the West plunged, so did China's import growth. China adjusted to a new, but far more challenging environment.