Chang covers a lot of interesting stories, but he draws too many blanket conclusions from the anecdote of the day. To him, every issue that comes up is the straw that will finally break the camel’s back. He wrote “The Coming Collapse of China” in 2001. He presumably meant within the next several years, not 14 years later. The news snippets he brings up are still interesting, but I wouldn’t hold my breath waiting for his big picture predictions to come to fruition.
These constraints include the upward pressure on China's currency due to her massive foreign earnings. China's response -- converting dollars to US treasuries, expanding her own currency base, and spending her earnings overseas -- works to a degree but has not prevented the emergence of potent regional low wage competitors like Vietnam, the Philippines, Thailand, and Indonesia.
The logical response is for China to move up the economic value chain into the design and production of higher priced and more technologically advanced products. Autocratic systems though are notoriously poor at creating the environment of competition and innovation that generates new products with world class quality and value.
Indeed, China has a deeply embedded culture of corruption and opportunistic cheating. The lack of internal market discipline and rule of law makes it hard for even the most necessary reforms to take root and become internalized into Chinese values and conduct.
Thus even advanced technology sectors that the Chinese have targeted for development, such as civilian aircraft manufacturing, high speed trains, and jet engines are all manifesting typically Chinese problems of excessive costs, project delays for obscure reasons, and failure to meet specifications.
Meanwhile, China's population is ageing and its workforce is beginning to decline in size. This will put China's need to provide care for a large elderly population into conflict with her industrial staffing requirements. Inevitably, the result will be rising labor costs, labor shortages, and a drag on China's economic output.
Moreover, China's vast waste of resources on empty factories and unoccupied apartment blocs and cities must soon be accounted for and written off, and a reliable bankruptcy mechanism must be contrived and put to use. As this happens, much of China's economic miracle will be seen to have been squandered by speculation.
China's population will thus soon be older but not yet rich. The large excess cohort of young men though is likely though to assure much ferment in Chinese politics.
The people who best know what is happening in China -- her wealthy entrepreneurs and government officials -- are all desperately circumventing currency controls to get cash out of China and trying to secure residency in the US or another English speaking country.