Yes, China's problem is just starting. Current China has to go through radical overhaul now that U.S. consumption engine went dead.
All nasty problems papered over by booming economy will come out in earnest and it will be quite ugly. Chinese elite has succumbed to the illusion that they figured out this capitalist thing. Any country with rapid economic growth from the dirt poor condition tends to have such an illusion. However, it is especially so for China. (1)Their perception that they were master of the universe in the past history which they think would assure such an exceptional success and (2) non-stop fawning press coverage from globalist elites in the West made them easily fall into this trap.
Up to now, they are ecstatic over how far things have gotten better. Now they will find out how little things have improved in many aspects. The realization would be sobering to them.
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Yeah but Chinese have their own unique problems because the mercantilist export driven business model is also kaput. For the time being at least."
They have the physical means that they need for a smooth transition and resumption of real (physical domestic) GDP increases. A good question might be, "But do they have the guru ability to get their population to go along?" Let's have a quick and sloppy look at some fundamentals.
China
* Enough heavy manufacturing for sustainment: steel, machining, fabrication, assembly, timber reserves (thanks to our monstrous exports of lumber to them), R&D, etc.
* Trading partners with natural resources (Africa, South America, Middle East, others).
* Consumer base and potential future consumers in their trading partners' countries.
* Savings and investments (enormous amounts of US dollars that they can dump).
USA
* Far less heavy manufacturing, some light manufacturing, assembly, aircraft and R&D mostly dependent on foreign sources of materials and engineering. Yes, some Americans own much heavy manufacturing, for the time being--mostly manufacturing that happens elsewhere.
* Trading partners all over the world--mostly cheap exporting producers.
* Natural resources--mostly idle--but not much equipment for harvesting/refining, unwillingness to hire American men (such hiring practice considered to e "misogynist," "Neanderthals" scary).
* Domestic consumer base in debt and probably a great percentage about to be impoverished. ...national diet of hysterical and insulting rhetoric regarding selected/purchased figureheads, celebrities and other notorious villains.
...and a tidbit of news that you might or might not have seen.
China to overtake US as largest manufacturer
By Peter Marsh in London
Financial Times Published:
August 10 2008 22:37 | Last updated: August 10 2008 22:37
Excerpt:
"
China is set to overtake the US next year as the world’s largest producer of manufactured goods, four years earlier than expected, as a result of the rapidly weakening US economy."
So there are the negatives from one who tends to look more at possible negative scenarios before possible solutions. Yes...that's me. Given the denials coming from the sponsored media and paying politicos (special interests) along with so many of our economic leaders snagging every illegitimate dollar that they can get from our government and economy in general, my guess is that we're beggin' for a beatin'.
On the other hand, if we were to see more realistic assessments about our national economy, defense, and so on, I would be preaching the "hope." Heh.
All over the world, the thing called ‘money’ is nothing but wood pulp and cotton waste. Trash with pretty pictures.
Naturally when the main churner, manipulator, chiseler, fraud and fake are governments, others follow along.
“The best thing China can do is make incentives for coastal immigrant laborers to go back to the farm for a while.”
Several countries could do that, like Mexico, and be better for it.
China does have the right idea about one thing. I heard yesterday that they are lowering business taxes.