Saturday, March 6, 2010

Chinese Economy: Miracle or Mirage?

"...while the Chinese people are satisfied with their incomes and the direction of the country now, it is only because they don't understand the shaky foundation of China's economy and the improbability of further expansion under the current mode of economic development based on cheap labor made cheap by the excessive devaluation of the yuan. And the Chinese people are increasingly concerned with the inequity of wealth distribution. In another ten years if there were no major shift to domestic development, the incomes of the Chinese people will remain stagnant while their purchasing power will decrease due to inflation. And they will realize too late that the current economic miracle was actually a mirage hiding a dangerous trap. If the CCP wants to implement a true economic miracle, then they must quickly reduce foreign trade while increase domestic consumption through the urbanization of the farmers, advance domestic technologies, and protect the domestic enterprises from foreign predation. Only by increasing domestic consumption based on the increased productivity enabled by advanced domestic technologies will the Chinese economy grow normally and constructively and allow the Chinese people to become the richest in the world and the Chinese nation to become the sole ultra-superpower in the world. And that is the only way to achieve an economic miracle in China."

The rest of this fascinating forum post is available here, I highly recommend it for anybody intrested in the Chinese economy and it's current state/growth prospects.