The whole global system might look precarious. But in particular, the coming collapse of China’s bubble Ponzi-scheme economy continues to come. The South China Morning Post’s Jake Van Der Kamp cites ever-expanding steel production and predicts that when the crash happens it will take the Communist Party with it, leading to something along the lines of post-USSR Russia. Anne Stevenson-Yang, looking at the property market, foresees a sharp fall in the Yuan and eventual recovery on a more sustainable basis – including a happy ending for Vitasoy.
Unless the ‘Beijing model’ incorporates the economics equivalent of a miraculous perpetual-motion machine, the current cycle of pumped-up growth must end, and the transition must bring some degree of shock and pain. The Communist Party’s instinct for secrecy and tendency to panic can only make it worse. Soothsayers are playing a game of ‘chicken’ with fate. Gordon Chang was maybe 20 years too early. The analyst who holds out the longest before announcing that the meltdown is imminent will be the most lauded for prescience.
Meanwhile, we can wonder how far the Mainlandization of Hong Kong will have gone by the time China’s economic reckoning rudely interrupts. Will pre-emptive or retroactive ‘interpretations’ of the law have become so frequent that we will have forgotten what it was like when we knew what was legal and what wasn’t? Will a rubber-stamp Legislative Council have passed sweeping laws on subversion, treason and theft of state secrets that curb the press and the lawyers? Will we still have a press and lawyers?
Reasons to look forward to a crash (besides picking up Vitasoy shares).