The Real Threat Is Stagflation
Inflation and unemployment share an inverse relationship, like a seesaw. High inflation rates come with low unemployment; high unemployment comes with low inflation—or even deflation when prices are falling.
Our country currently follows Keynesian economics—government intervention in the economy. Through government projects (like large-scale infrastructure), the state aims to reduce unemployment, create jobs, and raise people's general income. With more money in their pockets, people can consume: they buy homes, which drives demand for配套设施, and people who earn money buying homes will also buy furniture and appliances. The economy comes alive. Especially when the population is still growing, consumption is unstoppable. To further stimulate consumption and accelerate development, credit tools are introduced so people can spend money they'd earn over the next few decades right now.
But there always comes a turning point. As population growth stalls, the employment environment deteriorates, and desire to consume weakens, we enter a period of personal credit repair. Nobody wants to consume, which leads to stagflation: merchants sell less, costs don't drop, so to stay afloat they raise prices and lay off workers. The higher prices get, the fewer people buy. At this point, no matter what policies the government introduces, the market won't become optimistic, and employment won't improve. We're trapped in a vicious cycle: businesses go bankrupt, people lose their jobs, new startups can't lower their costs, prices stay high, and companies shut down quickly...
The next few years don't look promising at all.