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Q: Does anyone have an opinion as to the future of the Chinese economy?

Personally, I believe that the Chinese economy is headed for a noise dive into a long term depression.

2 years 49 weeks ago in  Lifestyle - Wuhan

 
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Posts: 1101

Governor

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This is a hard question to answer because the economy here is so opaque but I'll have a go. Long term, China will likely surpass the United States as the world's dominant economic power. GDP growth remains robust and the sheer number of people combined with free market reforms will continue to grow the Chinese economy. Infrastructure is improving nationwide and wages have been growing faster than inflation. The crackdown on corruption is real although there's a long way to go on that front. 

 

In the short term, they're in for some serious problems due to the real estate bubble, local government debt and the gross imbalances in the economy. Property investment is WAY too high and consumer spending way too low as a percentage of the economy. There are zillions of unoccupied residential units and a bursting bubble would massively hurt the wealth of average Chinese. 

 

 One should keep in mind that great economic powers don't grow in a straight line. The United States experienced numerous recessions and depressions on its way to the top. China is overdue for a downturn after decades of uninterrupted growth but this shouldn't stop the economic juggernaut that Deng Xiaoping unleashed not too long ago. China's getting rich whether we like it or not. 

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2 years 49 weeks ago
 
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General

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Well thought out arguments from dongbeiren above. I my self went from optimistic to cautiously optimistic to pessimistic about the Chinese economy.

 

I think that in the short-medium term China will grow just fine, maybe surpassing the USA. What I'm pessimistic about is:

 

1. China's ability as a high income, advanced economy. Things like education, environment, food safety, innovation and human, and economic rights make me think that China might not be able to make a transition to an advanced economy. Deep and structural reforms are needed and I'm just not seeing these being carried out.

 

2. The abilities of China as a society to handle a recession. We've all seen how Chinese people handle adversity. Another problem is that the CCP has all its "legitimacy" come from economic growth, and when this stops there would be a lot of angry people with nothing to lose in the streets. Worst case is, even though I despise the CCP, there is no real opposition, and if the CCP falls, it will create a huge power vacum in China.

 

I'm not saying what I just wrote is right, or that it will happen, but these are things that are making me feel uneasy. Also remember that for every doomsayer like me, there are even more optimists about China with even better reasoning.

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2 years 49 weeks ago
 
Posts: 2

Minor Official

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this is a really tough question and i think everyone in this forum has very good points. I feel the real problem in China is finding accurate and believable information. A case in point is the recent situation with commodities and the unwinding of fake collateral deals with banks. I would be interested to know anyone who has any other information on this. They found one pile of iron ore at a port in China that had over 20 claims against it as collaterall for loans (From Banks in HK) this whole ponzi scheme amounted to 20 billion!!!

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2 years 49 weeks ago
 
Posts: 2

Minor Official

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this is a really tough question and i think everyone in this forum has very good points. I feel the real problem in China is finding accurate and believable information. A case in point is the recent situation with commodities and the unwinding of fake collateral deals with banks. I would be interested to know anyone who has any other information on this. They found one pile of iron ore at a port in China that had over 20 claims against it as collaterall for loans (From Banks in HK) this whole ponzi scheme amounted to 20 billion!!!

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2 years 49 weeks ago
 
Posts: 726

Governor

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I never understand how the economy works in china. Shops employ more people than they need. There are more shops than customers. Newly built shopping malls are empty. Construction of apartment blocks far outpace the rate they are bought at. Everybody where I  used to live has a brand new imported car. Corruption is widespread from top to bottom. Taxes are low. No respect of copyright and little money spent on research and development. Any other country could not grow like this and would eventually crash. But china keeps getting richer.

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2 years 48 weeks ago
 
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Yeah China is a rich country that can't pay it's workers, has to  shake down foreign companies because they are too successful and is trying to reduce the number and salaries of foreign teachers all because China is a rich country.

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2 years 48 weeks ago
 
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This is today's topic on CCteli niouzzz dialogue, right now.

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2 years 48 weeks ago
 
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A: I'm prepared to give the guy some slack. He asked a few shifty questio
A:I'm prepared to give the guy some slack. He asked a few shifty questions in 2012 then went dormant for 5 years and suddenly appears asking newbie questions. A bit suss but who knows, he could just be a moron. Benefit of the doubt given.

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