In Unbalanced China from The Wall Street Journal’s The Source, Alen Mattich lists dire predictions of how an imbalanced Chinese society may crash economically.
Anything is possible. However, if China crashes, the first sound we hear may be the U.S. hitting the ground.
Alen Mattich lists the possibility of a trade war between the U.S. and China which could “threaten to bankrupt whole swathes of industry” if China doesn’t devalue its currency, the yuan.
Mattich is betting this prediction on other countries joining the U.S. in a trade war with China. Some may join but the odds are many will not.
Recently, the BRIC, Turkey, France, Japan and several oil-rich Middle East countries have sided with China against the shaky dollar, and countries like Brazil that depend on trade with China won’t side with the U.S.
Then Mattich mentioned the possibility of China’s properly bubble bursting. The urban property bubble in China represents about 15% of China’s economy and 40% of that property belongs to China’s newly minted millionaires.
In rural China, most of the land belongs to peasant collectives and the government.
In America, when the property bubble burst in 2008, that represented more than 70% of the U.S. economy.
Then the Chinese save an average of about 40% of earnings so the Chinese are not cash poor as the average American, who carries a lot of credit card debt.
Mattich also mentioned China’s aging population. Since 700 million Chinese work in jobs that are not linked to the export-import sector of the economy, I doubt if that will play much of a factor.
When Mattich mentions the one-child policy, he doesn’t say this only applies to the urban population of about 500 million.
The other 700 million rural Chinese are not bound by the one-child policy, and the 56 minorities in China that number 100 million have no restrictions on the number of children families may have.
The problems with many Western predictions about China’s economic future is that they are based on Western lifestyles and spending habits. China’s formula is different.
______________
Lloyd Lofthouse is the award-winning author of the concubine saga, My Splendid Concubine & Our Hart. When you love a Chinese woman, you marry her family and culture too.
If you want to subscribe to iLook China, there is a “Subscribe” button at the top of the screen in the menu bar.
iLook China 
“countries like Brazil that depend on trade with China won’t side with the U.S.” That’s rather a simplistic view of international economic and political relations isn’t it?
That is possible, but for Brazil to side with the U.S. against China on a global political issue at this time would not benefit Brazil if China decided to take its money elsewhere. Besides, the US has been throwing its political muscle around for decades bullying other nations and China uses different methods as they spread across the globe doing business, which developing nations seem to respect more.
In a global survey conducted in the UK, China ranked higher internationally in popularity than the US. However, China was only a few steps above the US. The US scored a 13 and China a 20.
In fact, I wrote a post about “The Sinking Dollar”, which appeared yesterday, at http://wp.me/pN4pY-1o9.
“Bloomberg says that the BRIC (Brazil, Russia, India and China) will put up a “strong resistance” to currency controls at the annual meeting of the International Monetary Fund and World Bank in Washington.” Quoted from “The Sinking Dollar” post.
The currency controls proposed by the US and other European democracies would benefit their troubled economies and it seems that developing nations do not want to have their currencies valued on that basis, which does not benefit them but may lead to inflation hurting many who live in poverty in those countries.