China's economic involution: overcapacity, debt, and implications for Europe (legrandcontinent.eu)

• China's industrial output grows but with declining returns and rising debt.
• Involution concept: increased inputs without proportional gains.
• Parallels with Japan's 1980s bubble: overinvestment and credit dependency.
• Weak domestic consumption pushes exports, threatening European industry.
• China's 15th Five-Year Plan prioritizes production over consumption.

"China's industrial strength continues to grow, but internal fragilities such as overcapacity, declining productivity, massive debt, and weak household consumption are intensifying. The concept of involution captures this dynamic of diminishing returns. Comparisons with Japan in the 1980s show parallels in overinvestment, credit dependency, and an eventual bubble. China's compressed trajectory simultaneously exhibits overcapacity, debt, and weak demand. This forces Chinese firms to export aggressively, threatening European manufacturing. The 15th Five-Year Plan (2026-2030) prioritizes production capacity over domestic consumption, extending the model's external pressure."