Wednesday, November 11, 2009

China - Red-Hot Dragon or Another Paper Tiger?

Many say China will get old before it gets rich due to its "One Child" eugenics program, but this article here argues that mismanagement by China's socialist leaders is heralding an economic collapse in China along the same lines as the US housing collapse.

Is China headed toward collapse?
But there’s a growing group of market professionals who see a different picture altogether. These self-styled China bears take the less popular view: that the much-vaunted Chinese economic miracle is nothing but a paper dragon. In fact, they argue that the Chinese have dangerously overheated their economy, building malls, luxury stores and infrastructure for which there is almost no demand, and that the entire system is teetering toward collapse.

A Chinese collapse, of course, would have profound effects on the United States, limiting China’s ability to buy U.S. debt and provoking unknown political changes inside the Chinese regime.

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