In “China The Black Box“, Barry Ritholtz demonstrates a better understanding of China than most I’ve read—at least in this piece. If you are willing to sit for a long read, I suggest clicking on the link. He does a good job explaining how China’s economy works and why it may survive for some time without an economic collapse like the 2008 US meltdown.
Barry Ritholtz
In summary, Ritholtz mentions how several prominent hedge fund managers in the West have said China is making mistakes economically. Then Ritholtz says there is no way these managers know what’s going on in the Middle Kingdom since China is half capitalist and half socialist and doesn’t fit any Western economic norms.
He says China is a unique civilization state, which gives it a tremendous advantage at this stage of its economic development, because China’s citizens have a singular desire to work hard and improve their material lot. It helps that the Chinese prefer to pay cash for things instead of using credit cards as in the US.
Chinese civilization has periods of order followed by periods of disorder and since China recently emerged from two centuries of disorder, the Communist government has a long way to go before it is their turn to leave the leadership stage.
Read how others get it wrong in Belching About China
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Lloyd Lofthouse is the author of the award winning My Splendid Concubine and writes The Soulful Veteran and Crazy Normal.
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