If it does, it brings the world down with it... Plus, does anyone trust communists to run a capitalist economy? Feels like trusting religious zealots with our own financial system (oh, wait, we're doing just that!)
Could China's red-hot economy collapse?
Fifteen years have passed since the collapse of Japan's asset-inflated economy.
Finally, though, structural reforms to overhaul the political, economic and social systems have begun to take effect and the economy is showing signs of recovery.
The crash of the Japanese economy in 1991 was triggered by sudden drops in land and stock prices. Six years later, in July 1997, similar bubbles popped throughout East Asia, setting off a regional financial crisis.
The Chinese economy has been steaming ahead for several years, fueled mainly by a construction boom and rapid growth in the auto industry. A lot of momentum is also coming from strong exports (especially to the United States) and two big upcoming national events: the 2008 Olympics in Beijing and the world exposition in Shanghai in 2010.
Observers have been warning for some time about the overheating of investment in the construction and auto sectors. Many point out that Chinese industry is awash in excess capacity, causing a large output gap between actual and potential production.
The current building boom is also troubling. Rare is the vacant lot in Beijing where a new building is not being put up.
In Shanghai, there are mounting concerns about land subsidence, stemming from a growing forest of high-rise buildings and excessive exploitation of underground water.
Assuming that the monthly pay of professors at Beijing or Tsinghua University is about 4,000 yuan, the 38-million yuan price of the average house in this district is equivalent to 800 years' worth of salary.
The Chinese government has been trying hard to curb the expansion of its own bubble economy, one driven by excessive capital investment and industrial production. The government has instituted restrictions on lending by banks and other financial institutions. It has also started taking steps to stem the rise of property prices.
February 17, 2006
US 1929. Japan 1991. China 2006? Will the Chinese bubble economy collapse under it's own weight?
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14 comments:
I give the 2008 Olympics in Beijing a 50:50 chance of going off at all. If I were the IOC I'd be in negotiations with Los Angeles right now. After WW-I the US just barely avoided a revolution caused by the same factors at work in China today.
I don't think "religious zealots" are at the controls of our economy. Cultural differences between people of faith and the secular crowd is a social component of our society, not an economic one. I find that comment offensive.
Left Las Vegas said...
..."religious zealots"... I find that comment offensive.
It is offensive. There are scads of reasons to dislike Bush's polices and execution. many legitimate. There may even be some particular reasons to dislike the man. Someone needs to look up zealot.
Someone needs to stick to the topic and get off their political soapbox. (Ahem, HP?)
China is acting currently as the 53rd state.
China currently is the US economy.
Amerika is not producing much value except for exporting greenbacks by printing and lending them to Amerikans and then heading off to walmart.
When it goes so does Amerika.
My point is that the religious zealots who are in control of the US government today are the most fiscally irresponsible administration in the history of the US. Well, OK, the Hoover administration came close, but...
Bottom line - let the preachers preach, and let the government govern, and don't mix 'em up. Or else you get what we got today - which is an incredible mess
Future generations will not look kindly at this era, and in the end the government is a reflection of the society who elected them.
HP is not a dem or a rep. Just an impartial observer.
It is = it's
Its (possessive)
i.e. "Will the Chinese bubble economy collapse under its own weight?"
Grammer, people.
"My point is that the religious zealots who are in control of the US government today..."
Someone didn't look up the word. Add to that a quick review of where the power in the Federal system resides. I think you are missing the point Keith. Even if you have a rational hatred of Bush et al it comes off looking like irrational hatred. It is the very nature of hatred to appear irrational. It just looks from the outside like YABR (yet another bush rant). Recognize that while you may honestly believe you are an impartial observer that opinion just doesn't even come close looking in. There's lots i don't like either, masqueading as a conservative when he's just a republican, spending like a drunken sailor, abandoning principle for compromise, transparent borders, socialized medicine, meddling in education, abbrogating market oversight duties. A long list indeed but which policies are anything except continuation and/or extenstion of the previous adminstration?
Zealotry denotes zeal in excess, referring to cases where activism and ambition in relation to an ideology have become excessive to the point of being harmful to others, oneself, and one's own cause. A zealous person is called a zealot.
The term Zealot, in Hebrew kanai, means one who is jealous on behalf of God. As a word in English it means anyone who is overly zealous. Specific uses in popular culture also exist. Particular aspects can focus on religion, politics, but can also apply to any other area where partisanship and its related dogma are fostered and encouraged.
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so, there you have it. and if you think rove/scalia/bush/ashcroft(sure miss that guy) are not zealots, then perhaps you yourself are one
regardless, the bottom line here is I think we need professional, qualified, intelligent leadership in charge of government. When we don't get that, we get a mess that we may not be able to dig ourselves out of. Our economy, our budget, our fiscal house needs to be run by folks qualified to look after them.
As a shareholder of a company, you'd want a CEO who could read a balance sheet running the joint. You wouldn't want Jesse Jackson, or Jerry Falwell.
As long as the "cute" crowd can make mega markups by middling the cheap China goods to the US debt ridden consumer the Chinese economy will continue to grow. Thank you greedy ones. The Chi-coms were finally the ones to sell America the rope from which to hang.
China's economy will not be collapsing.
Having lived and travelled in Taiwan and China for a several years since the late 80's I can tell you they are absolutely expert at accomplishing whatever they set out to do.
Have goal, will succeed. If they hit a rough patch they'll turn on a dime and switch tactics quicker than you can blink an eye to set off in the direction that's going to get them where they want to go.
And they'll do it with a great deal of consensus (even without the monolithic Communist party, it's a pretty consensus based society). There's a ton of energy in consensus that can move things forward much more quickly and completely than in places where consensus is lacking.
They want to modernize, they want to get rich and they want to be # 1 on the world stage.
I have no doubt they'll get all three wishes.
Yep, Phillip John. Just read your comment.
The Yangtze River type stuff happens all the time in Chinese cultures. Saw it in Taiwan too.
And let's not forget how Singapore went from a ratty claptrack slum to one of the most modern city/states in the world. Once again, the Chinese.
This is a mindset the Western world cannot even begin to fathom.
Grinch-
When i lived in Taiwan in the 80's it was polluted far beyond what I had ever dreamed human beings could endure.
There were parts of Taibei where the air was so thick with smokey gunk that you literally could not see 2 blocks away.
There were places down south where the plastic cracker plants were that had white crap floating in the air that looked like snow- it was pollution.
The main river thru Taibei was so full of junk that it had to be dredged just to set off the ignaugural sail of a new inter-city boat line. The mayor showed up with the bottle of champagne to christen it on it's maiden voyage, the boat started down river and was immediately haulted by a river full of decades of trash!!
I could go on and on. China was still pretty pristine at the time , no trash, no plastics, etc. and not many factories , no cars.
But I knew that when China got going, the pollution from that one country would be so outrageous it would pollute THE WHOLE WORLD.
But here's the amazing thing that happened in Taiwan:
One day in the mid to late 90's they finally said ENOUGH. And started cleaning up- quickly.
Friends who have been back since then say it is trully amazing how it has changed.
I expect China will do the same. Get unbelievably polluted as they hasten towards development and then say "Enough" and clean up quicker than all get out.
I also think they will be simultaneously developing clean energy strategies and industries with a powerful motivation to not only save their own situation but to corner the market around the world- something the US could have been doing for the past 30 years but decided to drop the ball on.
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RickJ
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