Japanese Researchers Think China’s GDP Could Crash to Minus 20 Percent in Next 5 Years

The problem: Their analysis makes sense.

A man walking by sculptures during a Crayon Shin-chan exhibition in Shenyang, northeast China's Liaoning province on This photo taken on July 11. STR/AFP/Getty Images

Yes, you read that correctly. The Economic Intelligence Team at the Daiwa Institute of Research put out a report saying the “most likely” scenario for the Chinese economy is a shocking minus 20 percent GDP growth later in this decade.

“It is not an overstatement to point out that this is of the utmost concern for those involved in the global financial markets,” it states in the report.

While most people know that China has created a huge debt bubble and misallocated most of the funds from it, Daiwa has calculated some numbers to quantify the problem and they don’t look pretty.

Source: McKinsey