A sociological factor not mentioned in the article is the prince and
princess syndrome that is a result of the one-child rule in China. These
kids grow up with a sense of privilege. It seems to me that there will be a
critical mass of this new generation who won't sit idly by if things don't
suit their fancy. China's baby busters are going to change the landscape.
Chris
------------------------------------------
Christopher P. Hahn, Ph.D.
Constructive Agreement, LLC
<mailto:[email protected]> [email protected]
P.O. Box 39, Bozeman, MT 59771
(406) 522-4143 (406) 556-7116 fax
------------------------------------------
From: [email protected]
[mailto:[email protected]] On Behalf Of Dr. Ernie Prabhakar
Sent: Thursday, October 06, 2011 2:56 PM
To: [email protected]
Subject: Re: [RC] China : Headed for a Fall ?
I agree, China is a dam waiting to burst. The only question is whether it
will explode or crumble.
Maybe not right away, but within 20 years. I'll put money on it.
-- Ernie P.
On Oct 6, 2011, at 1:53 PM, [email protected] wrote:
<http://www.realclearworld.com/img/logo_sec.gif>
October 6, 2011
Forget Greece, Keep Your Eye on China
By <http://www.realclearworld.com/authors/?author=Moises+Naim&id=4247>
Moises Naim
While the world's attention remains glued to the crisis in Greece
(population 11 million), in China (population 1.34 billion) things are going
on that we are mistakenly overlooking. Should the world's economic engine
stall, the consequences would be much more serious than any Greek problem,
even taking into account its impact on the wider European economy. Here are
a few boring facts about what is happening in China: manufacturing has
fallen for the third consecutive month; the construction boom is about to
bust; property prices are falling, and companies in the sector are finding
it hard to access financing. Local government debt is now equivalent to 27
percent of the economy, and experts say that 80 of that debt cannot be
recovered. Share prices of Chinese companies on the New York Stock Exchange
fell on the news that regulators found serious faults in their accounts.
The Financial Times' summary is a little less boring: "A sector that was
until last year the darling of international investors is turning into a
horror show [...] a development that would send shockwaves through financial
markets worldwide."
Does this mean that China is headed for a crash? Not necessarily. But there
is a strong possibility that China's economic growth is set to be derailed.
The accident could be financial, environmental, social, or international. A
collapse on the stock exchange that would wipe out people's savings, or some
kind of infrastructure disaster that would prompt millions to take to the
streets in protest, could be the spark that sets off a crisis that would
eventually hit the economy. And that would then quickly spread around the
world.
The social and political contract the Chinese Communist Party has with the
people reads like this: we create millions of jobs and promise continued
prosperity for you and you let us govern without you playing any part in the
process. If job creation stutters so does the regime's legitimacy, and its
ability to govern centrally as it has until now. There are other factors at
play as well that could have dangerous political consequences: inflation,
inequality, and corruption. Over the last decade, inflation has rarely risen
above two percent a year. It is now at 6.2 percent, while food prices, the
most politically explosive factor, have risen even higher.
Inequality before the boom was limited, and invisible to most people. It is
now among the worst in the world. Urban workers earn three times more than
peasants in rural areas, and the number of Chinese people among the
wealthiest in the world breaks new records every year, while China's
millionaires are, on average, around 15 years younger than those in other
countries. Corruption has long been a problem, but it is now increasingly
widespread, and far more visible, and affects almost all areas of life. The
government has tried to stem the flow of graft. But highly publicized jail
terms and even the death sentence for public officials are simply not
working.
Economic crises tend to turn corruption from an irritation that can largely
be put up with, even over long periods of time, into a powerful popular
cause that rallies the population. We should remember that corruption was a
determining factor in the downfall of the previous regimes in Tunisia and
Egypt. The same applies as regards mounting environmental problems, which
for many Chinese are not merely abstract issues. After a while, people get
tired of turning on the tap to take a bath or make a cup of tea only to find
that brown, foul-smelling water comes out. According to Sun Liping, a
sociologist at Tsinghua University, there were 180,000 street protests
against a multitude of issues in 2010. The Chinese are increasingly prepared
to take to the streets to demand their rights. If this kind of activity
starts to impact the economy, then what happens in China will affect us all,
and much more than what is going on in Greece.
--
Centroids: The Center of the Radical Centrist Community
<[email protected]>
Google Group: http://groups.google.com/group/RadicalCentrism
Radical Centrism website and blog: http://RadicalCentrism.org
<http://RadicalCentrism.org/>
--
Centroids: The Center of the Radical Centrist Community
<[email protected]>
Google Group: http://groups.google.com/group/RadicalCentrism
Radical Centrism website and blog: http://RadicalCentrism.org
--
Centroids: The Center of the Radical Centrist Community
<[email protected]>
Google Group: http://groups.google.com/group/RadicalCentrism
Radical Centrism website and blog: http://RadicalCentrism.org
