China's fragility

Reader comment on: Red Capitalism

Submitted by emerich (United States), Feb 17, 2011 21:31

As someone who's been going to China for over 20 years, the current view of China looks like a re-run of the 1980's except then it was Japan. Japan's economy was going to overtake the US economy before the end of the 90's. Then it stopped growing. Japan's savings and investment was way higher than America's, which was supposed to guarantee their faster growth rate. Sound familiar? Anyone who reads this site is sophisticated enough to know the problems with centrally run systems. We've also had some recent experience with moral hazard, which China's banks provide in spades. Japan stopped growing because the investments were unproductive and the hyper-bureaucratic environment hostile to productive entrepreneurialism. Ditto China.

Note: Comments are moderated by the editor and are subject to editing.

Comment on this item