WASHINGTON — China is likely to fall into the same economic trap as Japan did to muddle along with sluggish growth as it hesitates to deal with the overcapacity and excess debt issues, economists told a Senate hearing Thursday.

A further slowdown in the Chinese economy would affect the U.S. by denting the exports of China’s Asian and European trading partners and encouraging a flurry of global currency depreciation, witnesses told the Senate Banking Committee.

“China’s economic-growth model appears to have run its course, and China would now seem to be headed for many years of very slow economic growth, much as happened to Japan for the past two decades,” said Desmond Lachman, an economist at American Enterprise Institute, a conservative think tank.

“It’s very unlikely to get the bubble bursting in a way like in the U.S. because China has control of the banks and state-owned enterprises, it can keep pumping credit to keep zombies alive in much like what Japan did,” Lachman said.

http://www.marketwatch.com/story/china-likely-to-repeat-japans-lost-decades-with-debt-unbalanced-economy-senate-hearing-finds-2016-07-14

Great.  China has a shitty economy.

What's next?  Russia having the worst wheat harvest in a hundred years?

slow and steady is better than fake and rampant.  building empty cities

when the government over-revs the economy, you get a bubble

eventually the bubble pops

end of story

a lot of times when the bubble pops, you end up with a mega-recession or depression and no way to dig out

and nobody ever learns


back in the 1920s, people were allowed to buy stock with borrowed money

the stock market kept going up on borrowed money

factories kept making goods

eventually there was nobody to sell the goods to

the overheated market stalled out

all the people with borrowed money in the market got scared and pulled their money out

the market crashed and the US entered the Great Depression

China has insane inevitable growth. They will be dragging 1.5 billion people out of the fields and into the middle class.


WE have debt issues.

Thankfully http://www.bloomberg.com/news/articles/2016-04-19/russian-wheat-harvest-rising-to-8-year-high-as-weather-aids-crop

China has had a shitty economy for a long time now.

You don't think they've been building ghost cities for no reason other than keeping a billion screaming Chinamen busy, do you?

We have issues, but they have bigger issues.

The difference is that we, for the most part, own up to our deficiencies. China tries their hardest to obfuscate them up to and including killing people who dare to tell the truth.

They're not going to drag anyone out of the fields and into a nonexistent middle class when those people they're dragging can't even afford the cheapest possible housing in the empty cities.

Ironically, Russia will be the worlds largest wheat exporter by the end of 2016.

If I understand it correctly their "shitty" economy is growing at 7% but ours is only 1%...

Replace China with US and it's probably pretty fitting.

The Chinese Communist Party can offer their population two reasonable claims to legitimize their rule: 1) we're responsible for this economic growth  2) we've made China militarily strong and nobody can push us around anymore.  

If economic growth stalls long term that leaves only the military strength argument, and for that they need convincing enemies, and for enemies they need conflict.  The ghost cities are an embarrassing failure, there will be an irresistible temptation to change direction and attempt to kill two birds with one stone, to reinforce both arguments for legitimacy by spending recklessly on the military to stimulate the economy and muscle their way into new resources.

Obviously this path greatly increases the likelihood of war with the United States.

No one believes the fantastical GDP numbers from China's government. They are like the old communist propaganda regarding production targets and agricultural bounty. Though there are certainly large structural problems with the Chinese economy I don't really see an analogy with Japan's lost decade.