The China Bubble (?)
China is building us a Performing Arts Centre, at the end of Horton Place
China is building us a Performing Arts Centre. Which is nice. I still think they’re a bid dodge. There are signs that the Chinese economy is bubbly, and investors are already starting to bet against it. James Chanos is a short-seller who made his money betting against Enron, Tyco, home builders and banks. He basically bet billions that they would crash, and they did. Now he’s betting on a coming collapse in China. The one lesson I learned from the global recession is that if looks dodgy, it probably is. The Chinese economy looks dodge.
They’re basically splashing a lot of money around, but their system seems inefficient. Deep corruption for one, I’ve read estimates of 10% waste, though that’s an unreliable metric. Then there’s resource killing pollution, tons of poor people and huge money-losing state industries. Plus their foreign policy involves splashing out a lot of money to build things in other countries, though they often get significantly more back in loans and business.
As most of the world bets on China to help lift the global economy out of recession, Mr. Chanos is warning that China’s hyperstimulated economy is headed for a crash, rather than the sustained boom that most economists predict. Its surging real estate sector, buoyed by a flood of speculative capital, looks like “Dubai times 1,000 — or worse,” he frets. He even suspects that Beijing is cooking its books, faking, among other things, its eye-popping growth rates of more than 8 percent.
“The Chinese,” he warned in an interview in November with Politico.com, “are in danger of producing huge quantities of goods and products that they will be unable to sell.” (New York Times)
I dunno. That’s just one hedge. Bill Gates and Buffet and all are betting for, and I hope they (and we) will be OK. For me crashes happen to force us to change, though perhaps that’s a quasi-karmic belief. Maybe you can do unprincipled, unstructured growth. But maybe not. I wouldn’t bet on it.
Today on the 
Janith has updated 
This is highly dubious. Miss Travel is a travel/social networking site that connects ‘Generous’ and ‘Attractive’ travelers. To, like, travel together, I guess. It all seems a bit like arranged prostitution and trafficking. This is part of a broader online trend to connect rich men to younger, attractive women. Sites like 
Sri Lankan domestics never say anything, they just stop coming. My maid just stopped coming and when I finally pressed her she said I needed to get a washing machine. I was hoping to ride this one out, but I’ve run out of underwear and I have no choice. I finally caved and bought a washing machine, from 
China has tons of money as dollar reserves. Won’t that be a cushion?
I like China, it has done more for Sri Lanka than India.
[...] Indi.ca » The China Bubble (?)James Chanos is a short-seller who made his money betting against Enron, Tyco, home builders and banks. He basically bet billions that they would crash, and they did. Now he’s bett… [...]
China has enough money to save themselves from a disaster. They manufacture things and save a lot more than we do. They also don’t spend money they don’t have. China will survive nay major downturn without a major problem.
Correct Adrian…..
…and bear in mind that China is FAST moving from a cheap manufcaturing location, basing its competitive advantage on cheap, sweat-shop labour. The amount they are investing in infrastrcuture and ACTUAL education of its people – especially higher education and skills training… means that their rise to economic power would be much more sustainable than, say Dubai, for instance.
They are investing heavily in educating its young people in a variety of disciplines, so that in any eventuality, it has an easily trainable, educated workforce, capable of adapting to global changes…..
And I think that’s even more worrying… because that kind of investment has REALLY slowed down in the USA…. and the workforce has become far less re-trainable…
Only now after the global economic crisis has there been SOME movement in this area…. esp through community colleges offering great retraining courses to improve labour mobility.