Monday, February 15, 2010

China: the world’s next great economic crash

Like Dubai at the beginning of last year, China is now reaching the peak of a bubble.
Has the global economy recovered? Forecasters say there will be an uptick this year of 2.4 percent, but they’re forgetting something. China could fail soon, and, if it does, the world’s most populous state will drag the rest of us down.

At this moment, a Chinese crisis seems like the last thing we should be worried about. After all, last year China overtook America as the planet’s largest car market and passed Germany as the biggest exporter.

On Thursday, Beijing announced that growth for the fourth quarter of 2009 was 10.7 percent and 8.7 percent for the entire year. Some analysts said the numbers were so strong that the country zoomed past Japan to become the world’s second-largest economy. Stock markets, property prices, you name it: Everything Chinese is soaring.

1 comment:

  1. Yes I saw this coming a while back,  this is because China has the same policy for the majority of its people as other capitalist economies,  as seen in this clandestine paragraph from the article -

    "Beijing, ignoring advice from Washington and other capitals, did not in the boom times try to restructure its economy to favor consumption. Instead, the Chinese government sought to take maximum advantage of then-surging foreign demand. The role of consumption, therefore declined – falling from a historical average of 60 percent of the economy to about 30 percent last year. No country has a lower rate."

    The reason why they did not take advantage of this,  is because the money is already centralized in big business,  as the article went on to state -

    "Second, the state’s stimulus plan is taking the nation in the wrong direction. It is favoring large state enterprises over small and medium-sized private firms, and state financial institutions are diverting credit to state-sponsored infrastructure. Over the past three decades, China’s economy has expanded at an average annual rate of 9.9 percent because of the private sector, but now Beijing is renationalizing the economy with state cash."

    The only difference between the US and China in dealing with the majority of the people is this - the US stole from its people by flat wages and than lent them at high interest rates what they should have been paid in the first place - China just never had a surge forward with the majority of the people.  Both countries are only interested in maintaining at elite at the expense of the people.