Economist explains why China's growth miracle is failing

This is what China's capital of manufacturing Shenzhen

looked like in 1980, a backwater

fishing village in one of the poorest economies in the world.

And this is what it looks like today.

To me, this clearly demonstrates the power of China's incredible economic miracle.

A miracle that lifted more than 800 million people

out of poverty in just 40 years.

However, if you turn on the news right now, this is what you'll typically hear.

The world's second largest economy is stumbling on the alarms

sounding across the globe at China's worsening economic outlook.

That's due to worsening a worsening property slump, weak

consumer spending and tumbling credit growth.

So they just stopped releasing youth jobless data because it's so bad.

Is the economy in China in danger of a serious ongoing downward spiral?

So what happened?

How did China get so powerful so quickly?

Why is its economy then in trouble now?

And are its troubles so bad that China is no longer expected to overtake the U.S.

as the world's preeminent superpower?

The standard story is that China got rich by abandoning communism in 1978

and is now wasting its chance to become a superpower

by turning back to authoritarian communism.

But that story has always seemed overly simplistic to me.

After all, there are many countries like, for example, Russia,

that also abandoned communism and did not get so powerful.

Similarly, there are countries that have always been more open, like,

for example, India, that also didn't get as powerful so quickly as China.

Finally, if you look closer, China's economic miracle looks an awful lot

like that of Japan and other East Asian nations like Korea and Singapore,

even though China has never been as open as these countries.

So to find out the real story,

I spent weeks reading the research from renowned

China experts like Professor Michael Pettis, Wen and Dr.

Yi Wen and Dr.

Zongyuan Zoe Liu and I then combined their insights with those of development

economists like Nobel Prize winner Simon Kuznets and Professor Ha Yoon Chang.

And now I'm very happy to report that I believe

that I finally found the story that connects all of the dots.

The story that can explain how China got so powerful,