Posted on 08/19/2005 9:02:46 AM PDT by headsonpikes
Many are hopeful the threat of an economic slowdown will force the party to speed up much-needed reforms, but others remain skeptical. The government is relatively untested when it comes to stick-handling delicate fiscal matters, and its ability to make quick, informed decisions is bogged down by a glacial adherence to consensus-building and a generation of leaders born of the immensely destructive Cultural Revolution.
That raises many frightening possibilities, not just for China but for all those investors who've pumped billions into its rickety institutions. "If the Chinese banks collapse, the whole world economy collapses," Wilson warns. "The world economy is very dependent on China in ways we still don't completely fathom, and we won't for another five or 10 years." We do, however, know this: when Japan arrived at its day of reckoning, the rest of the world escaped relatively unscathed, and the lessons learned faded quickly. Should the same fate befall China, the pain will be spread far and wide. It's not something we're likely to forget.
(Excerpt) Read more at macleans.ca ...
Stepping down from the economic heights, in China there is no equivalent of say, a Dun & Bradstreet to inform businesses of the credit-worthiness of customers and suppliers. A well-connected little Canadian/Chinese company is filling the breach.
http://www.yangtzetelecom.com/s/CorporateNews.asp?ReportID=109815&_Type=&_Title=Yangtze-Telecom-provides-update-on-Credit-Management-System
Potentially bad for us, definitely bad for China.
One can only hope.
This sounds like good news to me. A shaky China cannot spend so much on the military. Russia found out that a world power needs cash.
Housing bubble, China bubble, I am going to loose track!
Notice that soon after Clinton came to power the reporting here changed.
Curious thing about that.
China's troubles may be the reason so many US investors are turning to India..
The many businessmen I know who commute from Canada to China are very optimistic about prospects there.
The Chinese will survive the upcoming collapse of socialist institutions quite well, imo, provided that the new civil society entities they are creating mature sufficiently prior to the approaching, and unavoidable state banking crisis.
Which reminds of the cartoon where the guy who was headed out the door to go to work, comes back in and says to his wife "Good news, honey, I won't have to commute to work today. The world is ending."
The next collapse of the Chinese economy won't have nearly the impact of 9-11. The US economy lost between $6-8 trillion, depending on who's estimate you use.
The entire Chinese economy isn't worth this much.
Yeah, I can see China falling apart. The LAST people in the world who know how to run a capitalist, free-market economy are a bunch of elderly communists.
But business people tend to be gun-shy. They may have their eyes blinded by $$$ signs right now, but it won't take a whole lot to wipe those out and cause all those dollars to be withdrawn from China and put in the safest place in the known universe. The US economy.
Europe, as we know, has MANY problems and practically nothing for growth prospects. Japan has its own problems and history that will make investors stay away for a long time yet. Russia's a basket case. Greater Arabia ditto. India maybe I suppose, but not if its a world-wide phenom.
Where else is there to put money into? Only the US.
If China falls apart, every one of these investors is going to get burned and start repeating to themselves at LEAST once a minute, "Fool me once, shame on you, fool me twice, shame on me." They'll come back to the US, ESPECIALLY if as some on this thread note, this becomes a world-wide problem.
"I think that a "world economic collapse" because of China is extremely unlikely. The underlying real economy in the US and Europe is strong and mature. Most likely, the financial turmoil would settle quickly, with Chinese dollar reserves being expended to buy their way out of trouble, bringing the dollar down and boosting US exports. If the US economy got into trouble at the same time, it would not be due to China but to the housing bubble collapsing."
Well put and agreed. The housing bubble coupled with outrageous energy could be the biggest recession of the last 50 years or even a depression. The ripple effects from our potential deep recession in the US would cause global recession. But China causing world financial collapse? I dont buy it either.
We've been through this a couple of times. We tried to expand into China back in the '70's, the Chinese ended up appropriating everything; buildings, equipment, etc.
Same deal again in the '90's.
It'll happen again. As people accumulate capital, the government will have no choice but to appropriate their assets and probably disappear them. US corporate assets will be appropriated to clean up the mess. It'll end up being another tax write-off and waste of time.
bttt
bttt
on the plus side oil would be $20 again
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