6 March, 2006

china’s boom/china’s bust

AsiaPundit admits to being a bit of a bear on China. It’s not that China’s economic growth is a myth. The ‘miracle’ is very measurable. However, anything that can be measured cannot be called a miracle.

There will be a crisis, it could be sparked by bad policies at home or abroad. A collapse of US housing markets, for instance, could easily plunge the Middle Kingdom into despair. When the crisis happens, the interesting thing will be how it plays out socially and politically.

The US tends to solve its problems quickly and has the political flexibility to dismiss bad administrations by ballot. Japan’s biggest crisis sparked a decade of deflation. After the Asian crisis Indonesia emerged a democracy, the Philippines never really found its feet, while South Korea made a wonderful transformation.

Perhaps a European historian can tell us what happened when the Weimar Republic collapsed, European history isn’t one of AsiaPundit’s areas of expertise.

Predicting when a crisis will occur is a crap shoot, although there are indicators that can provide warning signs. Guessing what happens after a crisis hits in next to impossible.

China Law Blog earlier this week posted a response challenging Minxin Pei’s doom-and-gloom article on China’s problems. Today Dan Harris, the blog’s author, notes that Tom Barnett and James Na have replied.:

Hindenburg-1I blogged a few days ago about a recent article by Minxin Pei predicting China’s enivitable fall. At that time I talked about the article having generated "quite a bit of buzz in the blogosphere."  The buzz is even louder now.   

I posted Dr. Pei’s article because I found it thought provoking, but I did not sign on to its pessimistic conclusion.  I suggested that those interested in these sorts of "big idea think pieces" on China should read "big idea" bloggers like James Na, Dan Drezner and Tom Barnett, whose views range all over the China optimist-pessimist map.   

Barnett and Na both took me up on my suggestion and both ran posts on the Pei piece.  Na liked Pei’s thesis.  Barnett did not. 

Separately, Tyler Cowen adds.:

I will go on record in agreement (with Pei). More specifically, how about a bone-crunching, bubble-bursting, no soft landing, Chinese auto crash-style depression within the next seven years? This is also my biggest worry for the U.S. economy, I might add.

If you are not convinced, raise your right hand and repeat after me: “China in the 20th century had two major revolutions, a civil war, a World War, The Great Leap Forward [sic], mass starvation, the Cultural Revolution, arguably the most tyrannical dictator ever and he didn’t even brush his teeth, and now they will go from rags to riches without even a business cycle burp.” I don’t think you can do it with a straight face.

Making a guess on when the crisis will occur, AsiaPundit will agree with Gordon Chang that China will collapse in 2005. That is inaccurate, but it does put AP in good company.

Speaking of Mr Chang, AsiaPundit will take this opportunity to gripe that he will miss one of Chang’s speaking engagements in Shanghai due to a scheduling conflict caused by the National People’s Congress. Worse still, AP will miss Tiara Lestari’s photo exhibit in Bali because of those darned ‘commies.’ Tiara had even offered an invite to AP.

China should collapse. It deserves it. The leadership of the Chinese Communist Party has - by refusing to reschedule its silly parliament - prevented AsiaPundit from meeting a really hot Indonesian model and former Playmate. This is personal.

Tiara Lestar Dutch Penthouse 08

Oddly, Mrs AsiaPundit doesn’t seem upset with the CCP over this latest outrage.

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by @ 12:21 am. Filed under China, Asia, Coming collapse, East Asia, Economy, Northeast Asia

2 Responses to “china’s boom/china’s bust”

  1. Fons Says:

    Maybe you can ask Gordon Chang how it feels to have been a bear who is wrong?

  2. ChinaLawBlog.com Says:

    Even though I’m the one who started this whole China boom/bust discussion, I think I’m just going to chuck it all in and move to Bali.

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