I’ve been reading and writing about it for 40 years and my guess is that – in ‘quality’ media like The Economist, Financial Times, Forbes, Bloomberg and the Wall Street Journal, none of the journalists understand even China’s economy – let alone its political system – and less than 10% of (unpaid) commentators those media do.
Clearly, none of these financial experts has taken the time to learn how China’s economy works – even though their jobs depend on it. Here’s a 15-year summary of the media’s grasp of China’s economy – in which all of the journalists are professional experts:
2001. Wilbanks, Smith & Thomas. and heightened fears of a hard landing in China. Global markets tumbled in the … healthy rally in the fourth quarter, with China’s market triggering its 7% circuit ….
2002. China Anxiously Seeks a Soft Economic Landing …A hard landing – a steep decline in economic growth leading to higher urban … to deal with wayward companies, said Andy Xie, a Morgan Stanley economist.
2003. The just-released inflation report for November 2003 is worrisome …. In the perception of the West, a hard landing in China is always the risk.
2004. The great fall of China? | If China’s soaring economy has a hard landing, the rest of the world. The Economist
2005. Will the Bretton Woods 2 Regime Unravel Soon? – The Risk of a Hard Landing in 2005-2006. Nouriel Roubini … In 2003, the world’s central banks added $440 billion of … 2 Since the transfer of $45 b of Chinese reserves to their insolvent state banks is effectively a diversion of.
2006. Can Beijing pilot China towards a soft landing? – Measures taken have yet to show results, and effects of a hard landing will hit far and … Since 2003, however, Chinese leaders have had to grapple with this …CCTR
2007. Is China’s Economy Overheating? – TIME. … So, why is it important that China avoid a “hard landing, and how serious is the risk that it might not?
2008. Hard Landing In China? – Forbes.
2009. China’s hard landing – Mar. 5, 2009 – Fortune. With exports shrinking and unemployment rising, China must find a way to recover. That will take longer than most think.
2010: ’Hard landing’ coming in China, warns Nouriel Roubini. The Australian.
2012: More Dismal Economic News from China: Is a Hard Landing …
2013: A Hard Landing In China Part 2 – Rest Of The World Impact …Investment Declines As China’s Economy Continues To Falter … That ought to make the hard landing aficionados, the uber bears of … That’s the lowest since November 2001 and down from a net 43% overweight just five …
2014. A hard landing in China: The risks in one graphic –. A hard landing in China: The risks in one graphic. Friday, 31 Jan 2014 | 6:37 AM ET . SHARES. SHOW COMMENTS. Please add a username to view …
2015. Forbes: Congratulations, You Got Yourself A Chinese Hard Landing ….
2016. Soros Says China Hard Landing Will Deepen the Rout in. China’s ‘hard landing’ may have already happened | Agora … .
Pathetic, isn’t it?
Maybe tomorrow. Maybe in 2030. Since our “experts” in the mainstream media have predicted this a thousand times over the past 30 years, we must conclude that nobody knows. (For a professional analysis of China’s growth prospects, read Much Ado About Nothing).
The premise underlying these predictions is that, like most Western nations, China is a congerie of capitalist fiefdoms whose overlords bribe the government in order to squeeze out one more quarter of profits and bonuses. That might describe the USA or Europe. Not China.
China is nothing like that and has never has been. China is a unitary state and Chinese consider themselves to be part of what Richard Nisbett calls ‘collective agency’. They don’t think like us and they don’t act like us. They think and act collectivly. Though Chinese individually may be poor, all of the country’s resources are at the call of its leaders all the time: banks, army, insurance companies, industries, and the 86% of its citizens who trust and admire their government.
China’s leaders, 8 remarkably honest engineers, meet every day to cooperatively and unanimously reallocate resources. Supported by hundreds of statisticians (a Chinese government strength for 1,000 years) they make adjustments to keep the country on track today, five years hence, and fifty years into the future. They may spend 20 years testing and refining a policy before implementing it nationally–if that’s how long it takes to gain consensus. They spent 50 years planning the Three Gorges then allocated 54% of the dam’s budget on creating new homes for those affected–because that’s what was required to maintain collective harmony.
Right now, they’re working with two provinces (100 million people each) which will cap CO2 emissions at current levels (one-fifth of ours) to see if their economies can continue to grow. Everyone in those provinces will participate, while the remaining 1.1 billion Chinese will observe. As lessons are learned they will be rolled out to the rest of the country.
It’s not rocket science. Any country could do it. But rationality is anathema to our capitalists (though not to Chinese capitalists, interestingly), who continue plundering our economies. And such cooperation and submission to the collective will is anathema to individualistic Westerners. So our economies have slowed and we seem unable to make the necessary, rational decisions. Meanwhile, theirs continues to steam ahead…