Here it comes. The only question is how soon and how hard.

TarJak · 07-19-13, 03:37 PM

http://m.smh.com.au/business/china/b...719-2q9h2.html

Signs of the looming economic crisis in China that the seeds for were sown when they propped themselves up by printing money in the early days of the GFC.

My take is that this crash will be much harder than the 09 one and will certainly impact Australia far worse than the GFC did. The impact on the global economy will also be significant.

Spiced_Rum · 07-19-13, 03:51 PM

An interesting article. One issue that will occur when their rebalancing takes place is increased cost of importing Chinese goods. China has deliberately kept their currency undervalued and so been able to underbid the West, thus all those cheap goods made in China could soon rise in price as they start to pay higher wages. Higher prices cannot be avoided because so many goods are now produced in China and not domestically.

Skybird · 07-19-13, 04:05 PM

It's difficult to really define what is due to overheating effects and what is due to the government's measures which has stated some months ago that it wants to sacrifice unlimited growth for greater sustainability and focussing on the internal market. The Chines leadership imo has absolutely understood that they cannot continue just like they did in the past decades and just press the pedal to the metal and race the production onto foreign markets, but that they have to consolidate their internal market due to growing social pressure and demands, and the disastrous environmental costs of their ways as they followed them so far until here.

Possible that they will not care much for damages to Western economies asnd global finance markets as long as they can indeed consolidate their internal economic status and meet public demands as a precautionary measure against public protest or maybe even unrest.

That they cannot run world's economic growth like a superman and totally unlimited for all time to come, is clear. They have to ease their gas pedal setting and shift focus from external to internal markets. With over 1 billion people, you cannot afford not to.

Who said that they want to repeat the great German illusion, as I call it now - to allow becoming completely and totally dependent on exports exclusively and staying that dependent on exports forever, like Germany has opted to do? Once German exports decline substantially, Germany is in danger to collapse like a card house in a storm, cause we have allowed to lose a sufficiently strong consumer interest on our internal market, and have tailored our spending on the incomes of the external market. That is short-sighted, and potentially suicidal. That's why I do not share the usual description of the German economy as a strong one. To me, an economy being hopelessly dependent on factors in the "outer sphere" where it has no control over, is no sign of strength, but weakness. Dependency always is a sign of weakness.

The Chinese leadership some months ago indicated in statements from several highranking politicians and speakers that they indeed am aware of the problem of their dependency from foreign markets, and that they want to change the economic course and consolidate their internal market at the cost of growth based on external markets. To my surprise, that was left almost unnoted and uncommented by Western politicians and analysts, only few cared to raise their eyebrow. Wishful thinking once again denying unwanted realities, maybe?

Short after last christmas I read a long interview with a Chinese economist who was close to the politbureau, and who spoke out what in the West is seen as utmost blasphemy: that the Chinese leadership is fully aware that unlimited economic growth is an illusion that cannot be maintained and if tried will always cause again disastrous fallbacks that appear in increasingly shorter intervals that eat up the former gains. He too spoke more about internal stability and sustainability.

What I mean is that Western analysts should not so very self-confidently speak out as if they knew about China. I have the impression that we all, most of us at least, are mostly unaware about their intentions and motives, economically at least.

Oberon · 07-19-13, 04:16 PM

I think Beijing would have to be blind and stupid not to have seen this coming and be prepared for it, and they are neither. IIRC, the latest five year plan was to focus on growing internal demand for goods over the export market. This will mean addressing some of the gap between the inland region and the coastal regions, and that's going to be a task that'll take a lot longer than five years, but is essential to undercut the power-bases of the far-left sections of the Chinese communist party which caused the recent scare with Bo Xilai.

Jimbuna · 07-19-13, 04:23 PM

As has happened so many times around the world in the past...what goes round comes round.....next!!

soopaman2 · 07-19-13, 04:26 PM

Just going from the thread Title, I said to myself "Thats what she said!"

Then I realized no woman would ever say that to me unless I paid, my suicide note is incoming.

garren · 07-19-13, 05:57 PM

Quote:

Originally Posted by soopaman2

my suicide note is incoming.

07-19-13, 03:37 PM	#1
TarJak Fleet Admiral Join Date: Jul 2006 Location: Sydney, Australia Posts: 17,052 Downloads: 150 Uploads: 8	Here it comes. The only question is how soon and how hard. http://m.smh.com.au/business/china/b...719-2q9h2.html Signs of the looming economic crisis in China that the seeds for were sown when they propped themselves up by printing money in the early days of the GFC. My take is that this crash will be much harder than the 09 one and will certainly impact Australia far worse than the GFC did. The impact on the global economy will also be significant.

07-19-13, 03:51 PM	#2
Spiced_Rum Ace of the Deep Join Date: May 2013 Location: Enjoying a run ashore Posts: 1,129 Downloads: 69 Uploads: 0	An interesting article. One issue that will occur when their rebalancing takes place is increased cost of importing Chinese goods. China has deliberately kept their currency undervalued and so been able to underbid the West, thus all those cheap goods made in China could soon rise in price as they start to pay higher wages. Higher prices cannot be avoided because so many goods are now produced in China and not domestically. __________________ Spiced_Rum "The only rocks I want to see are in my glass, and covered with lashings of Spicey and Coke"

07-19-13, 04:05 PM	#3
Skybird Soaring Join Date: Sep 2001 Location: the mental asylum named Germany Posts: 42,616 Downloads: 10 Uploads: 0	It's difficult to really define what is due to overheating effects and what is due to the government's measures which has stated some months ago that it wants to sacrifice unlimited growth for greater sustainability and focussing on the internal market. The Chines leadership imo has absolutely understood that they cannot continue just like they did in the past decades and just press the pedal to the metal and race the production onto foreign markets, but that they have to consolidate their internal market due to growing social pressure and demands, and the disastrous environmental costs of their ways as they followed them so far until here. Possible that they will not care much for damages to Western economies asnd global finance markets as long as they can indeed consolidate their internal economic status and meet public demands as a precautionary measure against public protest or maybe even unrest. That they cannot run world's economic growth like a superman and totally unlimited for all time to come, is clear. They have to ease their gas pedal setting and shift focus from external to internal markets. With over 1 billion people, you cannot afford not to. Who said that they want to repeat the great German illusion, as I call it now - to allow becoming completely and totally dependent on exports exclusively and staying that dependent on exports forever, like Germany has opted to do? Once German exports decline substantially, Germany is in danger to collapse like a card house in a storm, cause we have allowed to lose a sufficiently strong consumer interest on our internal market, and have tailored our spending on the incomes of the external market. That is short-sighted, and potentially suicidal. That's why I do not share the usual description of the German economy as a strong one. To me, an economy being hopelessly dependent on factors in the "outer sphere" where it has no control over, is no sign of strength, but weakness. Dependency always is a sign of weakness. The Chinese leadership some months ago indicated in statements from several highranking politicians and speakers that they indeed am aware of the problem of their dependency from foreign markets, and that they want to change the economic course and consolidate their internal market at the cost of growth based on external markets. To my surprise, that was left almost unnoted and uncommented by Western politicians and analysts, only few cared to raise their eyebrow. Wishful thinking once again denying unwanted realities, maybe? Short after last christmas I read a long interview with a Chinese economist who was close to the politbureau, and who spoke out what in the West is seen as utmost blasphemy: that the Chinese leadership is fully aware that unlimited economic growth is an illusion that cannot be maintained and if tried will always cause again disastrous fallbacks that appear in increasingly shorter intervals that eat up the former gains. He too spoke more about internal stability and sustainability. What I mean is that Western analysts should not so very self-confidently speak out as if they knew about China. I have the impression that we all, most of us at least, are mostly unaware about their intentions and motives, economically at least. __________________ If you feel nuts, consult an expert.

07-19-13, 04:23 PM	#5
Jimbuna Chief of the Boat Join Date: Feb 2006 Location: 250 metres below the surface Posts: 190,525 Downloads: 63 Uploads: 13	As has happened so many times around the world in the past...what goes round comes round.....next!! __________________ Wise men speak because they have something to say; Fools because they have to say something. Oh my God, not again!!

07-19-13, 04:26 PM	#6
soopaman2 Der Alte Join Date: Sep 2011 Location: New Jersey, USA Posts: 3,316 Downloads: 61 Uploads: 0	Just going from the thread Title, I said to myself "Thats what she said!" Then I realized no woman would ever say that to me unless I paid, my suicide note is incoming. __________________ If Hitler invaded Hell I would make at least a favourable reference to the devil in the House of Commons. -Winston Churchill- The most fascinating man in the world.

07-19-13, 04:16 PM	#4
Oberon Lucky Jack Join Date: Jul 2002 Posts: 25,976 Downloads: 61 Uploads: 20	I think Beijing would have to be blind and stupid not to have seen this coming and be prepared for it, and they are neither. IIRC, the latest five year plan was to focus on growing internal demand for goods over the export market. This will mean addressing some of the gap between the inland region and the coastal regions, and that's going to be a task that'll take a lot longer than five years, but is essential to undercut the power-bases of the far-left sections of the Chinese communist party which caused the recent scare with Bo Xilai.