Wealth Cycles: ‘China Will Collapse By The End Of 2011’
NOVEMBER 23, 2011
-Gordon Chang, Forbes.com
Europe seems to be on everyone’s mind the last few months. However, there is an elephant in the room that everyone is ignoring, and it's China.
For a while it seemed everyone was proclaiming that the 21st century would be “China’s Century.” Much like the 20th was “America’s Century,” and the 19th was “Britain’s Century.” Everyone just seems to accept the fact of China’s ascendancy.
But is it true?
Gordon Chang, who writes for Forbes.com, thinks otherwise. His prediction is that China will collapse by the end of 2011!
That leaves us a little over a month to see if Chang is right. He clarifies in this interview with Casey Research that he could be a month off, but that he believes China’s collapse is much closer at hand than anyone realizes.
Why does he think this? One of his first reasons is the type of corruption occurring now in China:
Along with the corruption, mass insurrections are becoming more commonplace in China:
And the kicker to the protests:
At the moment, the regime appears to be keeping its population happy with a growing economy. A good portion of the money buoying the economy is now coming from China’s stimulus packages. As a result they have ended up with scores of ghost cities, newly built and gleaming and empty of life. These are full-fledged cities built for millions of people, with only a skeleton population of 10,000-100,000 people living in them.
Another reason China could go down much sooner than we expect is because of our lack of information. In the United States, their is a free press with no internet censorship. As an example, WealthCycles.com has published many articles, blogs, and videos criticising the US Government and Federal Reserve on economic issues. This is in stark contrast to China, from the BBC:
Along with the government censorship of the population, there is also the cultural attitude of "face". We'll let Charles Smith over at OfTwoMinds.com explain:
This culture of face, along with China’s stranglehold over the media, prevents us from knowing the full details of the situation on the ground. This means China could go down much sooner than expected.
Then, of course, there is the Chinese economy. Of which, the main issue is the financial sector. Chinese bankers appear to have been using the “No one got fired for hiring IBM” logic in issuing loans. This makes sense, as China’s banking sector is highly politicized. Minxin Pei’s explains in his article “Swimming Naked in China”:
And what appears to be the most damning evidence of all, from the AP article “Top of Chinese Wealthy’s Wish List? To Leave China”:
Gordon Chang’s prediction of China collapsing before 2011 is a bit presumptuous. But we must admit, it does appear that China isn’t all that it is cracked up to be.