JIM ROGERS told ready, Imminent Collapse will be worse than 2008
The world is worried about China, but not for the right reasons Global financial markets were disrupted after the second largest economy in the world notched only 7 July boost to GDP in the first quarter a drool-worthy performance for most nations, but a disappointment for a country that regularly jumped 10 or more over the past three decades, economists actively discussing the habit that China has a hard or soft landing is that the step of the government and These questions stimulate growth miss the bigger picture the reality is that China is unlikely to see the astronomical growth rates, at least for a while you can never see them again.
The recent slowdown is not a temporary cyclical blip or only the knockoff effect of tepid global recovery in China's growth model is broken and can t be so easily fixed Since the beginning of capitalist reforms in the 1980s, China excelled by throwing tons of resources in modernizing the economy money mountain to build factories, roads and residential towers, and millions of poor people by making iPads, blue jeans and cars Under capitalism State of China, the bureaucrats often directed money into massive infrastructure projects or favored industries However, this engine can t keep growing indefinitely purr labor pools vacuum that filled the lines assembly Foxconn dry out China's one-child policy is ensured, by population aging faster labor has already to started to reduce even more disturbing, the -LED state obsessed with the investment system generates too much debt and too many plants, leading to a waste of resources and a degraded financial sector.
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This is what is happening in China today everywhere rotting are visible in a mad quest to dominate Cape Green Energy Chinese banks pumped billions in the manufacture of solar panels, creating hundreds of factories and vaulting China the world's largest producer now, the industry has become a victim of its own excesses in companies fail, symbolized by the recent bankruptcy of leading Suntech Power market companies Steel continue to invest in new capacity, even if the debt increases and mounting losses Each plant is supported by local officials eager to create jobs, but higher costs disdainful major investments in GDP, but not the health of the economy as a whole ineffective, the subsidized public enterprises credit swallow while the more nimble private firms starving foam market Real estate booming China challenges the government's efforts to calm the face of meager investment options on financial markets controlled China, couples choose divorce to avoid RESTRICTION tions and taxes on transactions of more The apartments scary, increased debt agency abruptly Fitch ratings said credit to GDP ratio reached 198 at the end of 2012, a startling increase of 125 in 2008 local government debt has increased in recent years to about 2 billion or 25 GDP risks have been exacerbated by the emergence of the shadow banking mysterious sources, unconventional loan often kept off the balance sheets of banks that George Soros recently warned could be as risky as the mortgage securities at risk toxic Wall Street tanked .
Where is this all headed Panda Huggers optimists believe that China's leadership is addressing these issues and there is no threat to the economic stability Dragon Slayers pessimists warn against similar surge in debt overthrew other economies financial crises Everyone, however, accept the current situation can last does the economy needs more to produce the same amount of debt of production for China to maintain its current operating model of growth, therefore the debt level should continue to rise to ever more dangerous levels.
There is also a consensus on the solution of economists have been warning for years that China must reduce its dependence on investment for growth and to help rebalance consumption play a bigger officials role of government highlight the signs of GDP first quarter growth was driven up more by consumption than investment, for example, but progress is at best an analysis of private consumption to GDP in China is still the lowest among major economies, the government simply balked necessary reforms to change the health care and pension Feeble households to save power; and controls on interest rates continue yields meager bank deposits, punish to save If anything, the more government policy has strengthened ancient China's growth model, including the stimulus package heavy state announced launched after the businessmen of China 2008 financial crisis speak of a loss decade of reforms stalled.
Although reforms in China soon, the economy is expected to slow in its transition to a heavy consumption growth But if China is dragging its feet on reform, growth will likely be slower anyway, as the old model stammers and creaking This means that shortly about all scenarios, the world can t count on a supercharged China to support global growth while the US and Europe remain mired in debt and unemployment but slower China can actually be a good reform, rebalance China's economy will be less risky, more stable strength in the global economy, the significantly higher risk comes from China, which has not cast its default could push growth model China now in a financial crisis that is really something to fear.
China Slows Economy The real reason why we should care, slowdown, China, economy, real.
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