The Contrarian View: Is China Headed Toward Collapse?
During President Obama’s trip to Asia, there’s been a great deal of talk about China’s emerging dominance of the world economy.
Politico recently ran a story that aired a very different viewpoint.
The conventional wisdom in Washington and in most of the rest of the world is that the roaring Chinese economy is going to pull the global economy out of recession and back into growth. It’s China’s turn, the theory goes, as American consumers — who propelled the last global boom with their borrowing and spending ways — have begun to tighten their belts and increase savings rates.
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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.
The story raises some interesting points, but count me among those unconvinced.