system
Given the following post, respond as if you're commenting on Reddit:
human
Chinese Economy - is it Doomed?

So, I like to stay up on current events and lately Im noticing all of my feeds (especially youtube) have headlines that amount to "China's Economy is going crash any day now!"

Now, I get the basics of the economic crsis unfolding in china, but what Im trying to understand is if the sitiation is as dire as these (mostly youtubers) make it out to be. 

I feel like since I am American, Im likely to see more content that has a pro-western bias to it, but the amount of content painting a dark cloud over China's economy seems too significant not to wonder if its really true. 

So what say you, big brain, reddit economists? Is Chinas economy really on the verge of collapse, or is this just sensationalist clickbait that Im consuming?
gpt
YouTube videos have been calling the collapse of China for many years now, in general because of a Western power fantasy that would really like to see China collapse so it doesn't continue to pose a threat to the current world order. It's also undeniable that both sides are waging a massive and very well funded propaganda campaign against each other where they both claim the other is on the brink of economic collapse. There's a few major issues plaguing the Chinese economy - some are not as bad as you think, and some are much much worse. The Chinese economy is still by far the world's fastest growing major economy, particularly as it does not have the same problems with growth and inflation that the West is experiencing. For example, 5Y credit default swaps on China's sovereign debt are trading only around 75bps (already heightened from war fears) which is slightly higher than Iceland, while Italy is trading around 139bps. To put that into perspective, people think there is roughly a 4% probability that China defaults over the next five years, versus 9% for Italy.

The housing crisis isn't really as bad as you think. There's been a lot of doom and gloom claims that the Chinese economy is propped up by construction, and with that gone it is going to explode. We have seen little evidence of this to date. The assumption was that the banks would implode and credit supply would completely cave - which we saw in the US in 2008 and Japan in 1991. Fortunately, China's banks are all state owned, which meant that the government could just play musical chairs with the debt, reallocating weaker bank assets to stronger banks. To manage the ensuing moral hazard, it has been using its authoritarian system to arrest, fine, fire, or otherwise destroy the people running the weaker banks. The net result is that while it has always claimed this, we are now able to see that China really does have some pretty unique and extra effective ways to deal with these sort of crises.

A lot of problems have actually been solved but is not widely reported in Western media. For example, a lot of YouTube videos talk about ghost cities, but that hasn't really been a thing since 2016. Ordos, the most famous ghost city has blossomed into a major city now. Pudong is now the highly prominent financial district of Shanghai. Chenggong became so overcrowded that it now has its own commuter suburbs within Kunming.

To be clear, some major problems like population decline are pretty real and well-discussed. That being said, every country other than the US is facing significant population decline; and China is not by far the worst. China's efforts to cope with population decline are very unorthodox, and involve practical things like incentives for children or school subsidies, but also very philosophical things like improving the "holistic quality of life" or "common prosperity" or "confidence in the success of our country". The idea that low birthrates are down to nihilistic philosophy is a very Asian concept - and is best exemplified by the South Korean concept of Hell Korea. Modern life is seen as so full of misery, inequality, corruption, and competition - that people have no desire to live in it, let alone to bring a child into the world. 

China's single largest economic risk is actually geopolitical. Having become a crucial lynchpin in the world economy, it is watching the West progressively decouple from it. To Chinese geopolitical hawks, the West is trying to take the economic pain of decoupling very slowly so that when it is fully decoupled it can start attacking China without repercussions. There are those who feel that China cannot afford to wait and let that happen, but needs to threaten / convince the West not to decouple; or otherwise decouple right now so that the West is forced to bear the economic pain all at once.