How Do You Say “Hard Landing” in Mandarin?
China needs close to 10% economic growth each and every year, to generate the 24 million new jobs, each and every year, it needs to accommodate the growth of the labor market and the influx of farmers to the cities. Well:
Standard Chartered late on Monday became the latest bank to downgrade its view on the Chinese economy. Its economists and strategists, led by Stephen Green, now forecast China’s gross domestic product will expand 7.7% in 2012 and 7.8% in 2013, down from their previous growth projections of 8.1% and 8.7%, respectively.
StanChart also expects interest rates on the mainland to be frozen at current levels until the fourth quarter of 2013, compared to an earlier call for one more cut. They see the next rate move to the upside in the October-December period next year, followed by more hikes the year after.
The GDP growth downgrade echoes market sentiment – a number of other banks, including Barclays, Morgan Stanley and Citigroup – have recently done the same.
With a once-in-a-decade leadership transition looming, the difficulties facing the incoming administration are significant. More importantly for those leaders, the game has changed, and is in need of a new set of rules, StanChart suggests.
The problem, of course, is changing the rules when you have only one ruling party and no legal or loyal opposition. Stasis is the desire; eventual collapse is the result.
Pumping your own tires, there, Mr. Green?
That’s a different SG, I assure you.
This explains the sudden desire to go to war with Japan over a couple of guano covered islands.
What could possibly go wrong?
China has a significant surplus of young men who are unlikely to find wives. There are a couple of traditional ways of dealing with such a situation, of which the Chinese government is well aware.
The damned Malthusian population-controllers have doomed us to live in Interesting Times.
Yeah, and you’ve got to feed and clothe every one of them too. A big Army means a big logistics train. It will be a force to contend with as long as it stays on the Continent. Once they try to leave, it will be a bit more difficult for them.
Most countries with large Armies dont have them for their martial skills. They are places to keep their young men busy with a sense of common purpose. Once they go into battle, its something else altogether. China has the success it has because it has taken a decidedly un-martial approach to foreign affairs. If that were to change, then the success they enjoy, ( let me say it another way, the food they like to eat) will stop coming to their shores.
China is a lacquered vase. From a distance it all looks rather expensive and elegant but get up close and you can see cracks everywhere.
This is not to say that I dont think China is a danger or that its Armed forces are dangerous. I just dont think they are as formidable as some would portray them to be. They are not 10 feet tall. They are men, they have their weaknesses like all men do and in China specific case; the more men, the more weaknesses.
Coincidentally, Instapundit linked to an article today about China’s “ghost steel” which is very interesting: http://www.zerohedge.com/news/how-chinas-rehypothecated-ghost-steel-just-vaporized-and-what-means-world-economy
It reminded me of how, in the 1970s, we had an electronics retailer here in the East named “Crazy Eddie” whose commercials were a part of local folklore (“His prices are insane!”) Crazy Eddie Stores grew like a weed and went public. Things seem to be going well until the auditors figured out that the huge amount of inventory Crazy SAID he had, he really didn’t have. What he would do is take the auditor to a warehouse full of goods and then quickly pack them up and move them to another warehouse just in time for the fellow to see them there. Eddie quickly left the country but eventually returned and was prosecuted.
Somehow, I think “ghost steel” is gonna leave a bigger dent in the world economy than “ghost stereos” did.
http://www.reuters.com/article/2012/09/16/us-china-steel-warehouse-idUSBRE88F0EJ20120916
Chinese banks and companies looking to seize steel pledged as collateral by firms that have defaulted on loans are making an uncomfortable discovery: the metal was never in the warehouses in the first place.
…As defaults have risen in the world’s largest steel consumer, lenders have found that warehouse receipts for metal pledged as collateral do not always lead them to stacks of stored metal. Chinese authorities are investigating a number of cases in which steel documented in receipts was either not there, belonged to another company or had been pledged as collateral to multiple lenders, industry sources said.
China has been expanding its economy with squirrely credit, now the bubble is beginning to collapse.
Five years (?) ago Dave Freer who writes sf/f told me that China was a lacquered vase, all cracked under the lacquer. I didn’t think he was right, but I do now. I also think that the idiots who want to take the US down (no? Really? Do you have any relatives who are communists? They say openly what the others only think) so China can be THE superpower are in for a surprise. Turns out, I think, their economy was a parasite on ours, not the other way around. Once more, the smart folks are believing a country with a controlled press.
Oh, but don’t worry. China always has the default mode of all communist regimes. It’s known as “primitive empire” (which is what communism resembles as a governing system) i.e. “Conquer and loot.” Or if you prefer an allusion to Independence Day “They’re like locusts. They destroy a place and then move on.” Just saying.
Maoism isn’t really Communism. It’s Confucianism, with the state replacing the family as the source of continuity. Right now the Mandate of Heaven hangs by a thread, and either they get a good emperor quickly, or descend into some wacky 21st-century variation on warlordism.