Skip to comments.Soros, Obama Are Wrong: China's Not All That
Posted on 07/15/2013 1:57:21 AM PDT by Kaslin
It was just two years ago that international, big-state economists were telling us that China would surpass the United States in GDP by 2016.
Economic, financial and progressive talking heads- whose hind parts are where their head parts ought to be- were then saying that China was to become the dominant economic player in the world by 2016.
That claim rested on the strength of an IMF report projecting GDP growth for China surpassing the US in GDP by 2016, just two years from now, by the specious use of purchasing power parity. Purchasing power parity is a math fiction that allows economists to count a 450 square foot , 7 bedroom apartment in Zhucheng as the economic equivalent of a 1,100 square foot 2 bedroom apartment in Lone Tree.
Armed with math like that progressives claimed that the IMF report showed that China was a much better economic model to follow.
Back then, liberals were hailing Chinas top-down economic management and acumen; marveling at the endless supply of people and sucking up to Commies like they were the reigning champions on the worldwide smash hit The World Has Talent.
Perfect order and global governance are not realistic expectations, George Soros told a group of sycophants at the Paris Club, in, er, Paris, France. However, it is a sad fact that Western democracies provide less successful leadership than China.
Its hard to believe I know, but even the President of the United States, Barack H. Look-at-Me Obama, was elbowed out of the spotlight by China.
It got so bad that the liberal savior was wishing out loud that he were president of China in Beijing, as opposed to being president of the most vibrant republic the world has ever seen.
The New York Times reported: Obama has told people that it would be so much easier to be the president of China. He was rightly savaged for that incredibly stupid, misguided and ill-informed comment leaked by incredibly stupid, misguided and ill-informed White House staffers to an incredibly stupid, misguided and ill-informed newspaper.
But something dreadful has happened to the command-and-control state since then.
Yes economics- and liberty, which is really the same thing- have elbowed China aside and the once-soon-to-be-most-powerful country in the world is looking more like a wannabe economy to the great surprise of George Soros and Barack Obama.
Growth in China, reports the Wall Street Journal, the world's second-biggest economy after the U.S., has been slowing since 2007's peak, but that slowdown has accelerated recently. This year, according to the government's target and economists' estimates, China is likely to see its weakest growth since 1990, around 7.5%.
By the by 7.5% is the official estimate yeah, the one the government says the economy will produce.
Some China watchers, however, are saying what we have said all along: Chinas demographics are real but the economy is paper dragon.
Chinese financial markets often seem less volatile than one would expect for a poor, developing country, wrote Michael Pettis via Mike Shedlocks Global Economic Trend Analysis, largely because of administrative measures that intentionally or unintentionally suppress normal volatility. These kinds of systems, however, are not less volatile. They seem less volatile because small shocks have minimal impact. Larger shocks, however, tend to cause a much greater than expected surge in volatility.
There is a lot to be said about having two billion people when your economy is growing, but hard to keep growing that way when you have the president in Beijing calling the shots with a lot of little presidents scattered in the provinces doing the same thing all anxious to cover-up their own Solyndras and Fast and Furious scandals.
Lets just say that financial transparency isnt a strength for China. In fact, ZeroHedge thinks that China's 2012 GDP growth was only 3-4%, half the reported 7.8%.
The chances for China to achieve both structural economic reform and a smooth growth trajectoryto have its cake and eat it too, in the manner to which it has become accustomedare now much reduced, says Andrew Batson, research director at Beijing-based economic consultancy GK Dragonomics, according to BusinessWeek. China needs to stop forcing SOEs (State Sponsored Enterprises) to make lousy investments. Yet it is precisely the governments ability to get the state sector to invest, regardless of the short-term outlook, that kept growth from being even weaker in the 2008 and 2012 downturns, writes Batson. China must give up its main tool for supporting short-term growth if it is to have a good chance of achieving decent longer-term growth.
That criticism is largely true here in the U.S. and in the European economies as well.
Politicians are sacrificing long-term economic growth for the Band-Aid that gets them from one election cycle to the next.
That dictatorships and democracies alike are both making the same mistakes should serve as a wake up call to both forms of government that they are out of touch, out of luck and out of ideas.
More Chinese disinformation. Feel sorry for poor China while we steal more of your industries.
China doesn’t have a better economic model except in one respect. They sell to us, then their government soaks up all the dollars earned through taxes equivalent to 90% of China’s GNP. Then with communist China’s government in control of the dollars, they direct those dollars into buying not U.S. Trade goods, but U.S. manufacturing know how. So they can sell us even more goods and continue stealing our industries.
And the stupid part is we are letting them do it.
It was only a short time before the collapse of the Soviet Union that CNN aired a special predicting its economy would overtake that of the USA.
We never said Leftists were smart. They are always surprised by events that most folks with common sense can see coming, but it doesn’t keep them from proclaiming themselves “experts” on any and all subjects.
China is taking us to the cleaners.
>>>It was only a short time before the collapse of the Soviet Union that CNN aired a special predicting its economy would overtake that of the USA.<<<
Soviet economy has huge, the problem is it was made out of mostly toxic assets.
So does Chinese.
Leftists are materialists, and to them everything is a tool and they are prostitutive tools... then they complain capitalists use them as tools... go figure. Stupid is as stupid does.
China: more limbs, no brains and intelligence destroying, full of sins, the true beast... and yes we worship this monstrosity.
You can steal technologies, but new business is built y free men.
While I agree free men are better at innovating, innovation occurs where the industry is. Once you lose an industry, the likelihood of innovation occurring in your country around that industry drops off dramatically.
Also, We now have almost 25% unemployment (shadowstats.com). Clearly new innovation in America is not keeping up with the off-shoring. It's time to stop the off-shoring and bring some industries back to the U.S. and put Americans back to work.
My hope is that the shale gas and natural gas production will usher in a new era of American manufacturing. Robotics requires energy. Cheap manual labor is less an advantage than it was. INTEL is in-shoring for this very reason —and to prevent intellectual property theft. Now if we can just prevent Obama’s EPA from shutting it down.
You’re right about the importance of cheap energy. We should have been building nuclear plants like crazy.