Is China crashing?

[NeverSure]

Here is an interesting quote from George Friedman's book - 'The Next 100 Years':

China is Japan (of the 1980s) on steriods. It is not only an Asian state that values social relations above economic discipline but a communist state that allocates money politically and manipulates economic data. It is also a state in which equity holders-demanding profits-are less important than bankers and government officials, who demand cash. Both economies rely heavily on exports, both have staggeringly high growth rates, and both face collapse when the growth rate begins even to barely slow.

Wow. I see no comparison. Japan, before WWII was already filled with good engineers and manufacturing ability. They didn't manufacture what others invented. They had their own products including the ability to build a war machine. China still can't engineer or build a good war machine. China builds for others what others invented, using technology brought to them from the West. China at best is a copier and a poor one at that.

Japan flooded the West with good small cars within ten years of WWII (Datsun/Nissan and Toyota) and began to make money on what they developed. China still can't do that.

China picks up the scraps of what others invent. They manufacture for the West under Western supervision providing only cheap labor. What China builds on its own without Western influence and guidance is crap. Look at their cars and scooters. Crap.

If I go to a store to buy an air compressor or pressure washer and it's made in China I know it's crap. If it's made in Japan it's probably good. If it's made in the US I know it's good.

China is Japan on steroids? That's actually laughable.

[chiang mai]

Japan didn't really start to infiltrate the US car market until 1970 hence more like 25 years after WW11

http://www.mcafee.cc/Classes/BEM106/Papers/UTexas/351/Toyota.pdf

As for the rest of what you actually and factually know about the internal workings of China and its industry et al, that's about zero.

[rucus7]

Is China Crashing? They can't be crashing that infers they are capable of taking off.

http://en.wikinews.org/wiki/China_sends_its_first_aircraft_carrier_to_sea

They can't build their own aircraft carrier. They may have 1.3 billion people, without technology they have already been left behind.

[Gomyway]

Here I have a very long report about the US-$ and even when it's already 8 years old, it's more actual then ever and worth to read.

http://www.studien-von-zeitfragen.net/Zeitfragen/Uncle_Sam__/uncle_sam__.html

[davejones]

Part of China's problem could be the quality of their goods. Or lack thereof. I have spoken with people from various countries that will no longer buy Chinese products. simply because of the poor quality. This is not built in obsolescence. There is no pride or quality in their work , which comes as no surprise considering the working conditions and inferior materials. All China has is a cheap labour force. With no real technology of their own.

Better not buy an iPhone then. In fact, you'd better really cut back on your shopping, because a huge amount of products are manufactured in China.

I doesn't matter who you've spoken to, the fact is that the West still imports huge amounts of goods from China. I don't see them stopping any time soon. Try speaking with a broader range of people. Maybe you just speak to those that have no idea how to control the quality of the goods they order.

[midas]

China is not crashing ....they have enough reserves and projects to keep them going

Stupid if one bash them based on the quality of the produce since they are only making what the rest of the world is ordering

I just bought a 40baht toy car made in china for the it to crash to the wall and have fun with...are there more expensive options yes ...would I pay for it to crash at the furniture or everytime I go out to a mall or market nope.

They have 1.3 billion in population only 10 percent have hot middle class status and the reality is the growth potential rather than the spent forced in most

As for creativity and design they have never professed to be the best in that so I am or sure why the comparison ...every country is good at something and clearly design and technology is not one of theirs

They love making money and are good at it .....

Except for these things............. which is the root of the whole problem really

http://qz.com/98045/chinas-ghost-cities-epitomize-the-problem-with-printing-money-paul-krugman-style/

[midas]

I see that Thailand bashing is now out of style with you and that you've decided to bash China instead, they say that a change is as good as a rest!

And you say there is no housing slump in the US but there certainly was, values fell by a large amount but the spin machine would have us believe that prices are starting to recover. If that's the case then why are the lumber mills at an all time low in terms of output? And just who are these buyers that are allegedly moving the housing market, it's doesn't seem to be Joe Public, rumour has it that it's corporate and financial America that's doing much of the buying, hmmm, that can't be good.

But back to Nike and IPod making the real money, they're doing so because their manufacturing has been exported to a country where labour and other overhead costs are cheap, that's not very American now is it, and what's going to happen when China isn't cheap any more, nowehere to go springs to mind. Oh well, if China does eventually find itself strapped for cash, perhaps it can sell some of the US debt it's accumulated over the years, that'll be fun to watch!

I never know where to start with you. You get things so backwards that I don't know why I bother.

Sawmills are producing at a low because tree huggers have shut off much of the forests, and the US is buying most of its lumber from Canada, and lots of it.

Housing starts are way up. Home prices have increased about 10% in the past year. Where I live it's more like 20%. Sales to individuals are up substantially. Yes, there is still excess inventory to flush out but not nearly as much and home builders are starting to make money again with actual sales.

US companies are making lots of money but not spending it. Wealth is accumulating.

China has to have foreign reserves in dollars or it couldn't do business. The dollar is the international unit of trade. If China sold all of it's US denominated reserves, it would be out of business.

The dollar is increasing against other currencies.

But you don't, apparently, want to learn anything.

neversure your patriotism towards your country is admirable but you really should take off your rose tinted glasses

28% of Americans have no emergency savings

Nearly Half Of Americans Have Less Than $500 In Savings: Survey

Edited July 6, 2013 by midas

[wolf5370]

Japan didn't really start to infiltrate the US car market until 1970 hence more like 25 years after WW11

http://www.mcafee.cc/Classes/BEM106/Papers/UTexas/351/Toyota.pdf

As for the rest of what you actually and factually know about the internal workings of China and its industry et al, that's about zero.

Japan's recovery post war, and it rebuild of it economy, was engineered by the west (USA mostly) to ensure that it didn't return to isolationism and fuming enviousness which had been its pre-war state. This also lead to various relaxing of international trade rules in its favour (which lead to technology dumping in the USA which wiped out the TV industry and almost the car industry too - and kieretsu conglomerates; interlocking companies that provide less than cost price parts/technology/labour/R+D/etc for the over all profit of the kieretsu). Germany had similar help - and this is why they have been two of the strongest economies since.

China does not share the same benefits, but it is reinventing itself economically (as Japan/Germany did) - which is hard work, but a real bonus in itself.

Personally I think the whole 65 million empty properties/10 new cities per year issue is weatherable given China's position and "luck" (otherwise known as good timing) with the current issues that other super-economies are currently neck deep in. There is not much difference with building up that debt than other countries printing money and upping their loans in real terms - its something to propel growth and position now over the fact that it needs to be paid off in the future - good management now means that the ability to do that is covered.

I think China's real problems going forward will be the internal politics and (almost feudal) juxtapositioning of powerful families for their trough time and hand outs (free loans with no payback expectation) - this has always been their since well before Genghis, but the difference now is the pressure; we are talking trillions of dollars and world-level power positions - things that have never been on the table before. It will take much to control this and stop the cauldron boiling over - that may well mean greater and greater hand outs, or something perhaps much less palatable.

It will be interesting to see how China evolves and changes (politically and culturally) as it moves whole sale into a material consumerist world. It may actually be just what the world needs in the long run.

[wolf5370]

I see that Thailand bashing is now out of style with you and that you've decided to bash China instead, they say that a change is as good as a rest!

And you say there is no housing slump in the US but there certainly was, values fell by a large amount but the spin machine would have us believe that prices are starting to recover. If that's the case then why are the lumber mills at an all time low in terms of output? And just who are these buyers that are allegedly moving the housing market, it's doesn't seem to be Joe Public, rumour has it that it's corporate and financial America that's doing much of the buying, hmmm, that can't be good.

But back to Nike and IPod making the real money, they're doing so because their manufacturing has been exported to a country where labour and other overhead costs are cheap, that's not very American now is it, and what's going to happen when China isn't cheap any more, nowehere to go springs to mind. Oh well, if China does eventually find itself strapped for cash, perhaps it can sell some of the US debt it's accumulated over the years, that'll be fun to watch!

I never know where to start with you. You get things so backwards that I don't know why I bother.

Sawmills are producing at a low because tree huggers have shut off much of the forests, and the US is buying most of its lumber from Canada, and lots of it.

Housing starts are way up. Home prices have increased about 10% in the past year. Where I live it's more like 20%. Sales to individuals are up substantially. Yes, there is still excess inventory to flush out but not nearly as much and home builders are starting to make money again with actual sales.

US companies are making lots of money but not spending it. Wealth is accumulating.

China has to have foreign reserves in dollars or it couldn't do business. The dollar is the international unit of trade. If China sold all of it's US denominated reserves, it would be out of business.

The dollar is increasing against other currencies.

But you don't, apparently, want to learn anything.

neversure your patriotism towards your country is admirable but you really should take off your rose tinted glasses

28% of Americans have no emergency savings

Nearly Half Of Americans Have Less Than $500 In Savings: Survey

and it was ever so. Personal debt and personal savings has little to do with industry wealth or GDP - indeed, modern consumerism has pushed the masses in to credit as apposed to pre-savings. This is fine assuming the status quo (ability to pay of the credit over time) and legal protection (unemployment insurance/limits to APR/limits to fees and charges/insolvency protection/etc). In countries where personal credit is limited to the few (or none), then we expect to see higher savings - like in our parents or grand parents time. This doesn't mean we are poorer (other than at a snapshot and ignoring the asset purchased), it means we are not prepared to wait - it also actually makes things cheaper in managed correctly and we take into consideration insurance, anti-fraud, promotional and fixed discounts and other credit card benefits.

[trogers]

Here is an interesting quote from George Friedman's book - 'The Next 100 Years':

China is Japan (of the 1980s) on steriods. It is not only an Asian state that values social relations above economic discipline but a communist state that allocates money politically and manipulates economic data. It is also a state in which equity holders-demanding profits-are less important than bankers and government officials, who demand cash. Both economies rely heavily on exports, both have staggeringly high growth rates, and both face collapse when the growth rate begins even to barely slow.

China is Japan on steroids? That's actually laughable.

Perhaps you have misunderstood. Let's clear this by another quote from the book regarding the economic performance of Japan in the 80s:

The casual ways in which Japanese banks made loans increased the number of nonperforming loans - loans that were not being repaid. A lot of bad ideas were funded. Rather than write these off and let the businesses involved go into bankruptcy, Japanese banks covered up with more loans to keep the companies alive.

The system was awash with money, but underneath it a vast array of companies on life support - and companies struggling to increase cash without regard for profit - were undermining the entire financial system. Massive surges in exports were producing very little profit. The entire system was churning just to keep itself afloat.

In the end, the debt structure grew too massive and it became impossible to stay in front of it with exports. Japanese banks began to collapse and were bailed out by the government.

How is this relevant to China? China is Japan on steroids.

As pointed out by some other articles, eg. ghost cities, it seems the China Central Bank is the body keeping failed banks afloat by printing money instead of letting them go into bankruptcy.

[Gomyway]

wolf5370, about "Germany had similar help - and this is why they have been two of the strongest economies since." I contradict you. Yes Germany hat monetary help but building up its industry after WWII again has nothing, absolute nothing to do with America - this was German know-how only and hard working. About this I could tell you more but we better let it be like it is, only here I could ask you why Americans or the rest of the world like the German cars and machines? But I also know this question I won't get any answer like before to the other ones.

And trogers you're also wrong when you say "it seems the China Central Bank is the body keeping failed banks afloat by printing money instead of letting them go into bankruptcy.", instead of printing money for bancrupt banks, like Europe and also America are doing, the newest news say that China especially this will NOT do.

[wolf5370]

wolf5370, about "Germany had similar help - and this is why they have been two of the strongest economies since." I contradict you. Yes Germany hat monetary help but building up its industry after WWII again has nothing, absolute nothing to do with America - this was German know-how only and hard working. About this I could tell you more but we better let it be like it is, only here I could ask you why Americans or the rest of the world like the German cars and machines? But I also know this question I won't get any answer like before to the other ones.

And trogers you're also wrong when you say "it seems the China Central Bank is the body keeping failed banks afloat by printing money instead of letting them go into bankruptcy.", instead of printing money for bancrupt banks, like Europe and also America are doing, the newest news say that China especially this will NOT do.

I agree USA had little to do with German recovery - but Britain did (so indirectly the States did too as the UK was still floating on Patriot Loans). Germany was different in that it was industrial, technological and not isolist like Japan was. I was really talking about Japan in this regard and only mentioned Germany in that trade rules were relaxed and the currency bolstered to right the economy after the war - for the same reasons; to remove the threat of WW3 20 years down the line (and to avoid the cluster fudge that the post WW1 "conditions" was - which caused WW2).

[Naam]

wolf5370, about "Germany had similar help - and this is why they have been two of the strongest economies since." I contradict you. Yes Germany hat monetary help but building up its industry after WWII again has nothing, absolute nothing to do with America - this was German know-how only and hard working. About this I could tell you more but we better let it be like it is, only here I could ask you why Americans or the rest of the world like the German cars and machines? But I also know this question I won't get any answer like before to the other ones.

And trogers you're also wrong when you say "it seems the China Central Bank is the body keeping failed banks afloat by printing money instead of letting them go into bankruptcy.", instead of printing money for bancrupt banks, like Europe and also America are doing, the newest news say that China especially this will NOT do.

I agree USA had little to do with German recovery - but Britain did (so indirectly the States did too as the UK was still floating on Patriot Loans). Germany was different in that it was industrial, technological and not isolist like Japan was. I was really talking about Japan in this regard and only mentioned Germany in that trade rules were relaxed and the currency bolstered to right the economy after the war - for the same reasons; to remove the threat of WW3 20 years down the line (and to avoid the cluster fudge that the post WW1 "conditions" was - which caused WW2).

you are both partially wrong Gentlemen. it is true that we had in Germany above average know-how but the success was built on three pillars. know-how and hard work, replacing destroyed production facilities with newer technology and last not least the cash and conditions of the Marshall Plan which was later (1951) replaced by the Mutual Security Plan.

without the financial aid provided, Germany's recovery would have taken many years more.

[NeverSure]

wolf5370, about "Germany had similar help - and this is why they have been two of the strongest economies since." I contradict you. Yes Germany hat monetary help but building up its industry after WWII again has nothing, absolute nothing to do with America - this was German know-how only and hard working. About this I could tell you more but we better let it be like it is, only here I could ask you why Americans or the rest of the world like the German cars and machines? But I also know this question I won't get any answer like before to the other ones.

And trogers you're also wrong when you say "it seems the China Central Bank is the body keeping failed banks afloat by printing money instead of letting them go into bankruptcy.", instead of printing money for bancrupt banks, like Europe and also America are doing, the newest news say that China especially this will NOT do.

I agree USA had little to do with German recovery - but Britain did (so indirectly the States did too as the UK was still floating on Patriot Loans). Germany was different in that it was industrial, technological and not isolist like Japan was. I was really talking about Japan in this regard and only mentioned Germany in that trade rules were relaxed and the currency bolstered to right the economy after the war - for the same reasons; to remove the threat of WW3 20 years down the line (and to avoid the cluster fudge that the post WW1 "conditions" was - which caused WW2).

you are both partially wrong Gentlemen. it is true that we had in Germany above average know-how but the success was built on three pillars. know-how and hard work, replacing destroyed production facilities with newer technology and last not least the cash and conditions of the Marshall Plan which was later (1951) replaced by the Mutual Security Plan.

without the financial aid provided, Germany's recovery would have taken many years more.

Yes Naam, but aid was given to other European countries including Britain. But who made the most of it? Germany. In Asia, Japan.

There is no where in the world where you can find better mechanical engineers or better production ability than Germany. I'm not saying it's necessarily the best, only that none is better. How many would guess that Volkswagen is the biggest auto manufacturer in the world, ahead of Ford and GM? Who would question the quality of engineering and build of BMW or Mercedes?

If something says "made in Germany" on it, I'll buy it out of well deserved trust.

Unlike the UK and some other European countries, Germany had a very hard pull to recover from WWII. But they wound up on top. This is talent, hard work, and determination.

[impulse]

Found this article the other day. Definitely not specific to China, but they're in the crash path like the rest of us, and as their murky financial sector "matures" into the same derivative products that brought us 2008, it could be bad. Real bad.

http://www.atimes.com/atimes/Global_Economy/GECON-01-010713.html

[yoshiwara]

Found this article the other day. Definitely not specific to China, but they're in the crash path like the rest of us, and as their murky financial sector "matures" into the same derivative products that brought us 2008, it could be bad. Real bad.

http://www.atimes.com/atimes/Global_Economy/GECON-01-010713.html

Meandering pontificating article going nowhere very much.

[Naam]

wolf5370, about "Germany had similar help - and this is why they have been two of the strongest economies since." I contradict you. Yes Germany hat monetary help but building up its industry after WWII again has nothing, absolute nothing to do with America - this was German know-how only and hard working. About this I could tell you more but we better let it be like it is, only here I could ask you why Americans or the rest of the world like the German cars and machines? But I also know this question I won't get any answer like before to the other ones.

And trogers you're also wrong when you say "it seems the China Central Bank is the body keeping failed banks afloat by printing money instead of letting them go into bankruptcy.", instead of printing money for bancrupt banks, like Europe and also America are doing, the newest news say that China especially this will NOT do.

I agree USA had little to do with German recovery - but Britain did (so indirectly the States did too as the UK was still floating on Patriot Loans). Germany was different in that it was industrial, technological and not isolist like Japan was. I was really talking about Japan in this regard and only mentioned Germany in that trade rules were relaxed and the currency bolstered to right the economy after the war - for the same reasons; to remove the threat of WW3 20 years down the line (and to avoid the cluster fudge that the post WW1 "conditions" was - which caused WW2).

you are both partially wrong Gentlemen. it is true that we had in Germany above average know-how but the success was built on three pillars. know-how and hard work, replacing destroyed production facilities with newer technology and last not least the cash and conditions of the Marshall Plan which was later (1951) replaced by the Mutual Security Plan.

without the financial aid provided, Germany's recovery would have taken many years more.

Yes Naam, but aid was given to other European countries including Britain. But who made the most of it? Germany. In Asia, Japan.

There is no where in the world where you can find better mechanical engineers or better production ability than Germany. I'm not saying it's necessarily the best, only that none is better. How many would guess that Volkswagen is the biggest auto manufacturer in the world, ahead of Ford and GM? Who would question the quality of engineering and build of BMW or Mercedes?

If something says "made in Germany" on it, I'll buy it out of well deserved trust.

Unlike the UK and some other European countries, Germany had a very hard pull to recover from WWII. But they wound up on top. This is talent, hard work, and determination.

but as i said... without the cash and other diversified assistance from Uncle Sam the recovery would have taken much longer and the expression "Wirtschaftswunder" (economic miracle) wouldn't have been coined only a dozen years after the war ended.

cash was needed! except for coal Germany lacks all commodity resources an industrial country needs in huge quantities. yes, there is/was some iron, copper, nickel, etc. but not in sufficient quantities. last not least the alpha and omega of any production is energy. Germany's oil production wouldn't cover the consumption of salad dressings

Volkswagen, BMW, Benz et al are globally well known. but the names which made German engineering and quality globally famous are usually not known by the average global inhabitant. i am talking about the relatively small or midsized companies in Germany's south (mainly Baden-Württemberg and to a lesser extent Bavaria) which produce specialised machinery and have their order books filled for years in advance.

Edited July 7, 2013 by Naam

[Naam]

back to the topic China. before discussing a potential crash of the Chinese economy a definition of "crash" should be established and the arguments of those who forecast a crash should be analysed. there are mainly two negative arguments, one is "ghost cities" and the other one is "banks overextended".

my [personal] view:

-it is only a matter of time till the problem "ghost cities" is solved.

-any banking crisis will be solved internally.

-should growth drop from the present estimated 7.5% to 3% or even 2% it is a matter of perspective to call it a crash. i know a bunch of countries who would be very happy to have 0.5% or 1% growth.

[Naam]

-should growth drop from the present estimated 7.5% to 3% or even 2% it is a matter of perspective to call it a crash

i forgot to add that if China's growth drops to 2% i can name half a dozen countries which would be in dire straits or in recession!

[NeverSure]

back to the topic China. before discussing a potential crash of the Chinese economy a definition of "crash" should be established and the arguments of those who forecast a crash should be analysed. there are mainly two negative arguments, one is "ghost cities" and the other one is "banks overextended".

my [personal] view:

-it is only a matter of time till the problem "ghost cities" is solved.

-any banking crisis will be solved internally.

-should growth drop from the present estimated 7.5% to 3% or even 2% it is a matter of perspective to call it a crash. i know a bunch of countries who would be very happy to have 0.5% or 1% growth.

You are talking about growth in GDP. Take away the construction which is part of GDP, and the growth is negative. Manufacturing has fallen dramatically. China's debt is now astounding.

Local debt Another

"If corporate and household debt is also counted, China's total debt load balloons to more than 200% of gross domestic product." Link

[Naam]

back to the topic China. before discussing a potential crash of the Chinese economy a definition of "crash" should be established and the arguments of those who forecast a crash should be analysed. there are mainly two negative arguments, one is "ghost cities" and the other one is "banks overextended".

my [personal] view:

-it is only a matter of time till the problem "ghost cities" is solved.

-any banking crisis will be solved internally.

-should growth drop from the present estimated 7.5% to 3% or even 2% it is a matter of perspective to call it a crash. i know a bunch of countries who would be very happy to have 0.5% or 1% growth.

You are talking about growth in GDP. Take away the construction which is part of GDP, and the growth is negative. Manufacturing has fallen dramatically. China's debt is now astounding.

Local debt Another

"If corporate and household debt is also counted, China's total debt load balloons to more than 200% of gross domestic product." Link

"China" has no sovereign debt but is a net creditor. you are referring to Chinese banks and their internal debt (forget about the peanuts amounts of those banks' external debt). internal debt, denominated in "internal currency" can be managed nearly infinitely, respectively till better times arrive. best example is Nippon, the country of the rising sun and rising internal debt.

the university educated eggheads, Nobel prize winners and gurus of various provenience who forecast gloo&doom for China always forget one thing. and that is no convential yardstick can be used to measure China's economy.

what can be measured or rather estimated is the impact on countries like Australia, Chile, Brazil, Argentina and some others who's exports to China will drop like a stone if and when China "crashes".

[churchill]

China Pledges to Boost Financial Support After Cash Crunch

http://www.bloomberg.com/news/2013-07-05/china-state-council-pledges-to-maintain-credit-after-cash-crunch.html?utm_source=Sinocism+Newsletter&utm_campaign=e7a163fce5-Sinocism07_07_13&utm_medium=email&utm_term=0_171f237867-e7a163fce5-24573061

[Loptr]

China still seems to be doing OK. Not fantastic growth, but still very decent. They've done a pretty good job with avoiding any sort of hard landing. But time will tell. Lots of issues there and if China sneezes, the whole world will catch a cold.

Isn''t China tightening now what many said the US should have done years ago....

short term pain long term gain ...

Correctomundo. The Chinese government has been pumping liquidity into the banking system when there is not enough capital in the system to handle inter-bank lending. They are tightening this policy and was the cause of the Shanghai Index to drop over 5% in just one day a couple of weeks ago. The bankers went to the well and it was dry, causing panic.

http://www.latimes.com/business/money/la-fi-mo-china-stock-market-20130624,0,228881.story

[Gomyway]

Don't fear to much about China's going down or maybe not so quick http://www.zerohedge.com/news/2013-07-06/bundesbank-warns-chinas-currency-its-way-becoming-global-reserve-currency

Maybe this is interesting too http://twoshortplanksunplugged.blogspot.com.au/2013/07/gold-chinas-ghost-cities-and-agenda21.html

[lovetotravel]

Don't fear to much about China's going down or maybe not so quick http://www.zerohedge.com/news/2013-07-06/bundesbank-warns-chinas-currency-its-way-becoming-global-reserve-currency Maybe this is interesting too http://twoshortplanksunplugged.blogspot.com.au/2013/07/gold-chinas-ghost-cities-and-agenda21.html

Zero Hedge has Zero credibility.

[Markaew]

Part of China's problem could be the quality of their goods. Or lack thereof. I have spoken with people from various countries that will no longer buy Chinese products. simply because of the poor quality. This is not built in obsolescence. There is no pride or quality in their work , which comes as no surprise considering the working conditions and inferior materials. All China has is a cheap labour force. With no real technology of their own.

Same story. Sounds like Thai goods as well.

[Gomyway]

I think the Deutsche Bundesbank has a higher credibility, so read from there http://www.bundesbank.de/Redaktion/EN/Kurzmeldungen/Current_issues/2013_07_03_nagel.html

And if you're afraid about China then take a VERY close look to ALL debt from Germany - you'll be surprised.

[trogers]

I think the Deutsche Bundesbank has a higher credibility, so read from there http://www.bundesbank.de/Redaktion/EN/Kurzmeldungen/Current_issues/2013_07_03_nagel.html

And if you're afraid about China then take a VERY close look to ALL debt from Germany - you'll be surprised.

Debt itself is not the issue. A crisis develops when debt is misallocated - not to sectors that are profitable, but to sectors more well connected even though they are of high risk of being nonperforming. And the danger multiplies when the economic structure is well hidden behind a smokescreen of manipulated official data.

[bkkfaranguy]

There is another problem they face that will slowly bring them down and that is the lack of a work force and there aging population. The majority of there population is 55 or older, Chinese culture requires that the children take care of there elders not the government, so you have a single child trying to take care of 2 parents or a married couple trying to take care of 4. So even with 1.3 billion people they have a shortage of workers and workers demanding higher wages.

Also many foriegn companies are finding out the hard way thats its not so easy to do business in China especially if you are trying to sell into the China market. You have a real disadvantage when trying to manufacture there compared with the local Chinese owned companies, in the way of tax breaks and government funding, many companies are relocating back to places like Mexico.

I agree that China is on a collision coarse to crash to many negative factors besides the above for it not too, you can not sustain growth making cheap products or copying other countires technologys.

Edited July 7, 2013 by bkkfaranguy

[jpeg]

I see that Thailand bashing is now out of style with you and that you've decided to bash China instead, they say that a change is as good as a rest!

http://tinyurl.com/lkb9hs6