Japanification Of China?

[william the wie]

In case you are a buzzword bingo fan I decided ri start this thread. Japanification means sliding into stagnation and a two or more tier employment market through the use of too much stimulus. China is the current worry in this area hence the title. Pin the Japanification tag on the scapegoat time. Kumite!

 

[Decus]

China is dependent on exports and their manufacturing sector is slowing. The government has fueled economic growth to date with its printing of money and what it couldn't cover a shadow banking system emerged to further fund what was needed:

"Moreover, the rapidly expanding money supply reflects a flood of loans from the banking system and the so-called shadow banking system that have kept afloat many inefficient state-owned enterprises and bankrolled the construction of huge overcapacity in the manufacturing sector."

http://www.nytimes.com/2014/01/16/b...hina-dwarfs-us-in-monetary-stimulus.html?_r=0

Stagnation is possible but implosion seems much more likely.

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[EdwardBaiamonte]

China is dependent on exports and their manufacturing sector is slowing. The government has fueled economic growth to date with its printing of money and what it couldn't cover a shadow banking system emerged to further fund what was needed:

"Moreover, the rapidly expanding money supply reflects a flood of loans from the banking system and the so-called shadow banking system that have kept afloat many inefficient state-owned enterprises and bankrolled the construction of huge overcapacity in the manufacturing sector."

http://www.nytimes.com/2014/01/16/b...hina-dwarfs-us-in-monetary-stimulus.html?_r=0

Stagnation is possible but implosion seems much more likely.

.

Many have been predicting that for years. It seems the only result from years of big govt lliberal interference with the economy is to slow growth down to about 7% per year. Also, Japan does not seem to be bad off. It is a tiny crowded country that pehaps does not need to show more GDP every year. Lets not forget that despite the so called stagnation they all have smart phones and all the other latest gadgets too so while GDP may not be up their standard of living seems to be.

 

[william the wie]

China is dependent on exports and their manufacturing sector is slowing. The government has fueled economic growth to date with its printing of money and what it couldn't cover a shadow banking system emerged to further fund what was needed:

"Moreover, the rapidly expanding money supply reflects a flood of loans from the banking system and the so-called shadow banking system that have kept afloat many inefficient state-owned enterprises and bankrolled the construction of huge overcapacity in the manufacturing sector."

http://www.nytimes.com/2014/01/16/b...hina-dwarfs-us-in-monetary-stimulus.html?_r=0

Stagnation is possible but implosion seems much more likely.
That seems to be the runner up opinion by a nose so from a contrarian position you are definitely on a possible right track.

.

 

[EdwardBaiamonte]

China is dependent on exports and their manufacturing sector is slowing. The government has fueled economic growth to date with its printing of money and what it couldn't cover a shadow banking system emerged to further fund what was needed:

"Moreover, the rapidly expanding money supply reflects a flood of loans from the banking system and the so-called shadow banking system that have kept afloat many inefficient state-owned enterprises and bankrolled the construction of huge overcapacity in the manufacturing sector."

http://www.nytimes.com/2014/01/16/b...hina-dwarfs-us-in-monetary-stimulus.html?_r=0

Stagnation is possible but implosion seems much more likely.
That seems to be the runner up opinion by a nose so from a contrarian position you are definitely on a possible right track.

.

how can you have an implosion when the govt stands ready to liquefy the system as needed.

 

[Mad Scientist]

Japan prints money but is relatively honest out it's economic situation.

China on the other hand lies 10x more than the US does about it's Economy.

 

[william the wie]

Ed, Weimar imploded. The Nationalists also tried to inflate their way out of their debts which is why the Chicoms got into power.

 

[Decus]

China is dependent on exports and their manufacturing sector is slowing. The government has fueled economic growth to date with its printing of money and what it couldn't cover a shadow banking system emerged to further fund what was needed:

"Moreover, the rapidly expanding money supply reflects a flood of loans from the banking system and the so-called shadow banking system that have kept afloat many inefficient state-owned enterprises and bankrolled the construction of huge overcapacity in the manufacturing sector."

http://www.nytimes.com/2014/01/16/b...hina-dwarfs-us-in-monetary-stimulus.html?_r=0

Stagnation is possible but implosion seems much more likely.

.

Many have been predicting that for years. It seems the only result from years of big govt lliberal interference with the economy is to slow growth down to about 7% per year. Also, Japan does not seem to be bad off. It is a tiny crowded country that pehaps does not need to show more GDP every year. Lets not forget that despite the so called stagnation they all have smart phones and all the other latest gadgets too so while GDP may not be up their standard of living seems to be.

Where it might be possible to compare similarities in the economies of Japan and China it is imprudent to suggest that the Chinese will react with the same patience the Japanese have continued to show in the face of great hardship.

A slowing economy could push China towards increased social unrest (levels of discontent regarding corruption, pollution and jobs is already high). A slowing of the Chinese economy could ultimately become the tipping point. A good article on the subject:

"The possibility of revolution still appears remote, but the risk of larger-scale social unrest in urban areas is growing. To divert attention from trouble at home, China’s leaders may be tempted to flex their muscles abroad."

Politics The urban voice The Economist

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[william the wie]

The AliBaba IPO is part of a worldwide war on middlemen that is screwing up employment markets. Combined with the rise in Chinese wages and American productivity the choices are bad and worse.

 

[EdwardBaiamonte]

The AliBaba IPO is part of a worldwide war on middlemen that is screwing up employment markets. .

dear, when you cut out the middle men you save tons of money that you pass on in lower prices thus making your customers richer.

Getting richer is a good thing!! A child should know that?

 

[EdwardBaiamonte]

A slowing economy could push China towards increased social unrest

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the most trivial of our worries by 1000%. The Chinese people are far far richer than ever. The number that used to starve to death under liberalism now gratefully buy cars under capitalism so unrest is highly unlikely and if there was any it could easily be put down by an all powerful communist government. Next?