A most peculiar crisis is developing for the Chinese economy – and, indeed, for the regime – while the world’s attention is riveted on the chaos and terror in the Mideast and Russian aggression in Ukraine.
Not the smallest element is the clever manipulation by Beijing’s strategists of the world’s hopes for continued remarkable Chinese growth as a last call instrument to bail out a dawdling world economy.
That misapprehension of China’s economic capacities may well forestall, again, at least for a time, an inevitable coming to grips with basic problems of it vast society under the Communist Party monopoly. But there is growing evidence that China’s financial problems have reached a crescendo that Beijing can no longer manage.
In that marvelous game of speculation on one of the world’s oldest cultures, I have always joked that the Chinese have two “extra” genes to others’ DNA: one is an inordinate capacity for hospitality, and the other for unlimited risk at gambling. Both are in full flower at the moment.
In effect this has led to foreign Old China Hands increasingly coming around to a pessimistic view of the outcome of events that some of us have held for years. The spectacular growth of China with the release of the unique energy of its people with the collapse of Maoism was nevertheless jerry built. Some of us have argued that it inevitably would crack – although as so many times in similar historical situations, what would be the final straw and when it will happen was unpredictable. As a result, I have had to suffer my friends continued scorn with “Yeah-yeah-yeah! you have been saying that for years” – and I have. But there is no doubt now that that moment of decision is rapidly coming closer.
Still, a continuing element in the Chinese equation is the rush of its trading partners to either help camouflage the actual situation, or, indeed, scurry to its aid.
That is the case now with their acceptance of a proposal by China for a multi-billions-dollar multinational bank to be directed by Beijing, ostensibly lending for Asian infrastructure. It would rival the Bank for International Reconstruction [the World Bank] and its financial sister the International Monetary Fund.
Full article: Daydream believers: Tapped out world economy now rushes to bail out China (World Tribune)