A. Jacksonian says China Has Problems. He gives a long and detailed look at China's current situation (bad) and its future outlook (worse).
* He looks at economic problems - non-performing loans in the 30 - 60% of GDP range.
* Demographic problems - an aging population and too many men
* Ecological problems - rising lung cancer rates from pollution
* Lack of business accumen - drug dealers in America could do better
* Internet and cell phones breaking government control of information
* The break down of social cohesion
The short version: get your money out of China while it is worth something.
Note: Slight correction to non-perfoming loans bullet (GDP added)
DEDICATED TO EXPOSING DISINFORMATION AND PROPAGANDA AND TO PROMOTING UNIVERSAL HUMAN RIGHTS - WITH SHARP ANALYSIS AND BLUNT COMMENTARY. NO ADS. NO TIP-JAR. JUST THE TRUTH.
2 comments:
THE BAD LOANS ARE MOSTLY A SYMPTOM OF CORRUPTION. THINK "SAVINGS AND LOAN" TO THE 10TH POWER.
BUT A FEW OF THE OTHER THINGS ON THE LIST ARE GOOD SIGNS.
MAYBE NOT FOR INVESTORS BUT FOR THE CHINESE.
LIKE THE BREAKDOWN OF "SOCIAL COHESION" AND THE PROLIFERATION OF CELLPHONES/INTERNET.
BTW: REMEMBER THAT THE SO-CALLED TRADE DEFICIT IS BS - A PHANTOM BOGEYMAN WHICH DOESN'T EXIST.
WE NO MORE HAVE A TRADE DEFICIT WITH CHNA THAN YOU HAVE ONE WITH YOUR GROCER.
EVERY TRADE WITH CHINA IS A SQUARE DEAL - EVEN STEVEN: WE GET GOODS (WE LATER SELL FOR A PROFIT), AND THEY GET MONEY - THEY INVEST.
IF THEY INVEST HERE THEN THEY GET A RETURN.
IF THEY INVEST THERE, THEY MIGHT LOSE EVERYTHING.
BOTTOM-LINE: WHEN WE EXPAND TRADE WITH CHINA WE WIN.
When 30-60% of the GDP of a Nation is based upon businesses that cannot repay loans you are looking at something far larger than the Japanese or SE Asian bubbles which hovered in the 15-20% range, respectively.
China sees no need to put in modern manufacturing plants, and those bad loans go to cronies and politically aligned people, who have little or no want or need of business acumen. Our expansion of trade towards such a Nation is risky, at best, and encouraging non-economically viable expansion that is liquidating the Chinese society at its roots. Beyond that China is more than willing to engage in regimes that openly oppose the US and sell them advanced Chinese adapted Soviet technology.
China has also seen fit to do its best to get US stealth technology, rocketry technology, satellite technology and still aims to utilize those, even when its underlying industrial basis has no firm basis economically.
I do not push the 'trade deficeit', I do see that the problem in China is not heading down a path that is likely to end anyplace that is good for us or the world. At the end of the 19th century enforced trade with China also caused the social structure to de-cohere, caused large scale social upheaval and, in the end, got the world the Maoist Revolution. They saw nothing wrong with ending the drug problem by simply executing all drug users, dealers, suppliers and their families. On the social side the way China is sliding is very reminiscent of post-WWI Weimar Germany... the social not the political side, so do not look at that from the Nazi/Communist fighting that went on, but from the loss of identification of the German People to their Nation.
That is what our encouraged trade with China is buying. They have not 'opened up' nor 'liberalized' nor 'embraced capitalism'. Not that American trade actually thinks about that... it is all about the consumer, and zero about the Nation. Without a functional underlying social structure to the high use of technology you do not get peaceful anarchy nor sublime turning to liberal freedom and the rights of man. The repurcussions of the Opium War was loss of use of drugs by the individual at home, all to satisfy the moral outrage at what was going on in the Far East. And if this strange idea of 'trade freeing people' instead ends up with greater tyranny, mass graves and fractured society looking for a Great Leader, I expect we will *all* pay the price for those cheap goods now.
Post a Comment