Twofish's Blog

August 18, 2009

China is DOOMED DOOMED DOOMED

Filed under: china — twofish @ 3:15 am

So says this article….

http://www.foreignpolicy.com/articles/2009/07/23/the_china_bubbles_coming_but_not_the_one_you_think

This is a great article for summarizing everything the bogus notions that I’ve seen about the Chinese economy.  It briefly goes over pretty much every single fallacy of the Chinese economy.  Two of them are:

1) the false analogy.  In particular bad things happen when you compare a company with a nation.  Nations can do things like print money, and if you end up with an overproduction problem, then the rational thing to do is to start dropping money from the skies so that the factories are producing.  If you really have overcapacity, don’t worry about borrowing money.  Just print it.

2) overgeneralization – One building in Shanghai fell down and therefore the entire Chinese economy is doomed.

Also if you google for “China” and “bubble” you end up with this article from 1994

http://www.foreignaffairs.com/articles/49881/richard-hornik/bursting-chinas-bubble

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2 Comments »

  1. Totally agree. There was another front-page article in the latest FP that basically brushed off developing asian nations, china in particular, as future-less and doomed to chaos and upheavals.

    I especially agree that the example used of the fallen Shanghai building to represent china completely, and I say gravely, ignorant and brainless. The western view of china lives on ridiculous stereotypes and improper anecdotes – because they truly know so little about China and are too lazy or xenophobic to learn.

    Comment by asdf — August 18, 2009 @ 5:24 pm

  2. The China collapse party is pretty funny in that they WILL be right some day. Everything that exists is doomed to die; if they’re not right in 10 years, they’ll be right in 20, if not in 20, then 40, if not 40 then 100, if not 100 then a thousand. They just have to keep on blowing the Collapse of China Trumpet; they’ll be eventually right.

    Comment by Inst — August 25, 2009 @ 2:29 pm


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