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So, is that system a time bomb for China (and the rest of the world), when one day a financially critical entity doesn't have the right political influence and

by DavidSJ 12y ago

So, is that system a time bomb for China (and the rest of the world), when one day a financially critical entity doesn't have the right political influence and goes belly up, bringing the house of cards down? Or, is there some reason to think this can go on forever and the political system will keep bailing everyone out?

joe_the_user 12y ago
I think the parent would argue that if the state chose not to support a given entity, it would simply support all the others and so financial collapse could still be averted. Edit: and the state can do that because it's a dictatorship quite willing to print its own money (though the US sadly little different today). The point here isn't that collapse is inevitable but that if you postpone collapse forever, you'll pay a worse price in price distortion than you'd pay if you let the system collapse. Perhaps the people in the slums will riot because they're tired of watching the empty ghost cities rot. But given the imbalance here, that possibility might be present universally.
- vorg 12y ago
  > Perhaps the people in the slums will riot because they're tired of watching the empty ghost cities rot Despite the recent price inflation of luxury goods, the cost of rice and noodles has remained constant. Workers can still eat for 12rmb (us$2) a day, or 20 if they want vegetables and some pork. The water and power supplies are still reliable, and the governments in China are investing in infrastructure to keep them so. Construction and its flow on industries is what's keeping a large chunk of Chinese workers employed. Whereas there's problems with the luxury property market and other high end industries, the Chinese are carefully watching their social bottom line, such as ensuring cheap food and water for workers. There's still a long way to go in health care, education, and clean air though.

by DavidSJ 12y ago

joe_the_user 12y ago

I think the parent would argue that if the state chose not to support a given entity, it would simply support all the others and so financial collapse could still be averted. Edit: and the state can do that because it's a dictatorship quite willing to print its own money (though the US sadly little different today). The point here isn't that collapse is inevitable but that if you postpone collapse forever, you'll pay a worse price in price distortion than you'd pay if you let the system collapse. Perhaps the people in the slums will riot because they're tired of watching the empty ghost cities rot. But given the imbalance here, that possibility might be present universally.

vorg 12y ago
> Perhaps the people in the slums will riot because they're tired of watching the empty ghost cities rot Despite the recent price inflation of luxury goods, the cost of rice and noodles has remained constant. Workers can still eat for 12rmb (us$2) a day, or 20 if they want vegetables and some pork. The water and power supplies are still reliable, and the governments in China are investing in infrastructure to keep them so. Construction and its flow on industries is what's keeping a large chunk of Chinese workers employed. Whereas there's problems with the luxury property market and other high end industries, the Chinese are carefully watching their social bottom line, such as ensuring cheap food and water for workers. There's still a long way to go in health care, education, and clean air though.