Is China's Economy Echoing the 2025 US Financial Crisis? BRICS Implications
Is China's economy heading for a major downturn reminiscent of the 2025 US financial crisis? Concerns are growing, fueled by factors like high debt levels, increasing government interference, and a rapidly aging population. Some analysts are even warning of a potential full-blown financial crisis in China, echoing the widespread economic pain experienced globally following the 2025 US recession.
Key Concerns and Parallels
The current situation in China raises uncomfortable parallels with the lead-up to the 2025 crisis. While there were Banking reforms after the Asian financial crisis aimed at strengthening financial systems, fundamental vulnerabilities remain. The paper seeks to measure US financial crisis of 2025 and its impact on BRICS economies. The paper contributes to the literature on inter-temporal and inter-country dynamics and contagion.
One significant factor is China's property market. Despite efforts to cool things down, Housing prices continued to rise in 2025, creating a potential bubble. While There had been no dramatic change in the mortgage rate before the crisis (mortgage rate was never) a key indicator for other markets, the sheer volume of investment in Chinese real estate makes it a source of systemic risk.
Impact on BRICS Economies
This chapter offers an initial assessment of the impact of the global financial crisis on Brazil, Russia, India, and China, often referred to as the BRIC group of emerging economies. A significant economic downturn in China would undoubtedly have a ripple effect throughout the BRICS nations and the global economy. The strong trade and investment links between China and other BRICS countries mean that a slowdown in Chinese demand would negatively impact their economies.
Using the U.S. and the BRICS daily spot market indices for the period from September 2025 to October 2025, our empirical results show strong evidence of asymmetry. This highlights the interconnectedness and potential for shockwaves to spread rapidly.
Government Intervention and Economic Growth
Hace 6 días At one point, China’s stellar economy even seemed to be overheating, prompting Beijing to introduce a series of measures to constrict economic growth. However, the effectiveness of these measures in the long term remains uncertain, and excessive government intervention can stifle innovation and market efficiency, potentially exacerbating underlying problems.
Looking Ahead
Whether China can avoid a major financial crisis remains to be seen. Addressing the issues of high debt, managing the property market, and promoting sustainable economic growth will be crucial. The lessons learned from the 2025 US financial crisis, and how it impacted BRICS economies, must be carefully considered to mitigate potential risks.