Crouching Tiger, Soaring Cranes, Rumbling Doubts...

[TarJak]

http://www.smh.com.au/business/crouching-tiger-soaring-cranes-rumbling-doubts-20110128-1a8b8.html

China's economy headed for a fall? With China's economic boom going full tilt there are several pundits saying watch out for a big bust in the next couple of years. Their monetary policy appears focussed on keeping their export markets open for as long as possible by artificially keeping the Yuan echnage rates low and the longer they do that without addressing the inflation going on within their superheating internal economy the higher the risk of there being a blowout.

[Jimbuna]

My concern is that they will take a few countries economies down with them.

[TarJak]

Mine too, Australia's in particular. Given their military build up I'm concerend that they may also decide to use a hostile take over of someone else's economy if they do have a massive blowout and panic sets in.

[Skybird]

They are in danger of "overheating". Changes to their economic policy have been announced juist short while ago, and have been started to get implemented, but this needs time. They said they want to readjust the slider away from their dependency on exports, towards strengthening internal demand . The de facto agricultural autarky they enjoy, was mentioned as an example, Chinese commentators said. Their currency policy they will run in support of this policy, and there is little the West can do about it.

If you want to help against an internal collapse of the Yuan - stop porinting dollars like crazy and flooding the markets in China with them. What American economists refuse to understand is that the problem of America is not China's strfength - but America's weakness and immense structural deficits. Instead of printing dollars like mad, start to tackle these structural problems. So far, nobody even seems to think about that. And that'S why American economy does not gain swing, and the latest numbers, also form the labour and housiong market, once again where a very disillusionising disappointment.

Start to get your tremendous heaps of homework done, America, instead of always pointing fingers at others. The Chinese manipulate the currency (America does that since it gave up since Bretton Woods...), Germany exports too much, yeah yeah yeah we have heared all that since years. Sit down and do your own homework, America. Just endlessly living on tick and mounting debts - that's not it.

[Oberon]

I wondered when this would start to happen, yes Chinas economy is so damn fragile that anything that breaks the US economy will completely screw the Chinese one. They have built themselves a huge bubble and unless they start to focus more on internal markets in the next five year plan then that bubble is going to burst and all hell will break loose.

[TarJak]

They are in danger of "overheating". Changes to their economic policy have been announced juist short while ago, and have been started to get implemented, but this needs time. They said they want to readjust the slider away from their dependency on exports, towards strengthening internal demand . The de facto agricultural autarky they enjoy, was mentioned as an example, Chinese commentators said. Their currency policy they will run in support of this policy, and there is little the West can do about it.
The article points out that what they say they are doing and what they are actually doing are two different things. I'm not sure that they can make the swing from their export dependency without a fair amount of upheaval and pain, which may also hurt their neighbours and western importers of Chinese made goods (read everything you wear, read, watch TV on, listen to the radio on...etc. etc).

[bookworm_020]

Tarjak, there was an interesting Foreign Correspondent ep on the ABC a few weeks back about this. China is over producing and under consuming. It's in a great big bubble, and if it goes pop, it will make the current GFC look tame.