When household debt levels rise precipitously and huge amounts are spent on wasteful public sector projects, then an economic downturn is inevitable.

That is where the Chinese economy is headed, said Amir Sufi, an economist and academic at the University of Chicago Booth School of Business. He spoke at the school’s 2016 Economic Outlook session in Manhattan on Wednesday. Sufi and another economist colleague from the business school predicted “a major economic slump” for China, whose government has followed some egregious economic policies.

Why? The effects on bad central planning along with the results of the government trying to keep up the stock market. These disastrous policies are showing up even though the Chinese government is often trying to fudge the figures, said Sufi, a professor of economics and public policy at the university.

“They keys are debt and durables,” he said. The key for the Chinese economy is to obtain much better productivity growth, the academics said.

Besides rising household red ink, Sufi, along with his university colleague Randall Kroszner, said the Chinese government has been spending huge amounts on projects no one wants to use. They also criticized the Chinese government for a lack of economic transparency.

So how, besides a recent crash in the Chinese stock market, does Sufi prove that China is headed for an economic downturn? Sufi pointed to a recent decline in electricity consumption and the declining number of rail freight cars. Kroszner also warned that the Chinese government is trying to manipulate its stock market.

“They are trying to use the stock market as a policy tool. And it becomes very difficult for them to let it go down,” according to Kroszner.

Will the problems in China pull down the American economy and stock market? Sufi, a self-described bear, and Kroszner hedged.  On the plus side, they said that the integration between the U.S. and Chinese economy is still relatively low. However, they noted that it is difficult to know where the interconnection between the two economies could cause problems.

The Fed, the economist said, will be watching for the potential effect of a bad Chinese stock market on American markets. So it will likely raise rates very slowly in the short term. “The path is going to be very gentle,” Kroszner predicted.

Probably only one more interest rate hike will take place this year. In the meantime, both economists agreed that the U.S. consumer, about three quarters of the American economy, is doing very well.

And what does that mean for the U.S economy? “I think we’re likely to grow by 2 percent a year over the next few years,” Kroszner said. “We’ve been fortunate to have a relatively robust consumer sector.”