In The Long Run China/Yuan May Win

The challenge is a complex mix of politico-economics, But in the long range the Chinese controlled economy/exchange rate may win. China may well become the last man standing. Certainly after Europe and possibly after USA dollar

The West Spends an unsustainable much on Interest (Except for Scandinavia and Switzerland)

Europe

France now spends about 8–9% of its government budget on interest.
Italy and Greece are higher again.
For several euro countries, the interest bill is already close to the limits of what is politically tolerable

United States

The US spends roughly 13% of federal spending on interest payments.
That is a bigger share of the budget than most major European economies.

China

Officially, about 18–20% of China’s government spending goes on interest.

But that number sits on top of three key features:

• state-owned banks are pushed to lend to government at low rates

• state enterprises recycle profits back into state finances

• capital controls keep domestic savings trapped inside China

If you strip those supports out and apply more market-like funding costs, China’s “true” interest load would be well above 20%. The point is not the exact number, but that the system is designed to carry it.

Europe: First to Crack

Europe’s weakness is political, not arithmetic.

Debt stress has moved into the core: France now combines high deficits, rising interest costs and repeated government breakdowns. Germany will not write blank cheques for the south. France cannot impose deep adjustment. The eurozone cannot agree on a shared solution.

When that happens, markets take over. The euro weakens, borrowing costs rise, and austerity is forced rather than chosen.

Europe is therefore the first major bloc likely to be pushed into crisis by high debt plus limited political capacity to act.

The US: Lasting Longer, Still Sliding

The US interest bill is already heavy, but the dollar buys time.

Because the dollar is the world’s reserve currency, global demand for US assets lets Washington roll its debt on a scale nobody else can match. That delays the reckoning, but it does not remove it. Debt service is growing faster than tax receipts, so the long-term direction is still negative.

The US almost certainly outlives Europe in a debt squeeze, but it is still drifting toward harder choices.

China: Built To Endure

On paper, China’s numbers look worse. In practice, its institutional design gives it more staying power.

• State banks absorb government debt at policy-set yields, not market yields.

• Capital controls stop large outflows into foreign assets.

• State enterprises act as a hidden tax base, with profits indirectly supporting the budget.

That mix lets Beijing tolerate an interest burden that would trigger a funding crisis in an open democracy. China is not healthier; it is more insulated from market pressure.

Who Survives the Debt Endgame?

If high interest costs remain a structural feature, the likely order is:

• Europe fails first, blocked by fragmented politics and a rigid currency system.

• The US lasts longer, supported by the dollar but dragged down by compounding interest.

• China lasts the longest, using a controlled financial system to suppress the forces that topple open systems.

On current trends, China – not the US and certainly not Europe – is positioned to be the last major economy standing.