Comments on: The Mother of All Bubbles http://thisischinablog.com/2009/08/10/the-mother-of-all-bubbles/ The trends reshaping China society, economics and business Mon, 14 Nov 2011 07:22:47 +0000 hourly 1 http://wordpress.org/?v=3.1.2 By: outcast http://thisischinablog.com/2009/08/10/the-mother-of-all-bubbles/comment-page-1/#comment-489 outcast Mon, 10 Aug 2009 10:32:39 +0000 http://thisischinablog.com/?p=788#comment-489 I'll also add that there is a headline in the financial times stating the government is ordering banks to put the breaks on lending, so it appears mr. xie's assessment about the government's action is correct, hopefully he is also right about it limiting the size of the bubble. I’ll also add that there is a headline in the financial times stating the government is ordering banks to put the breaks on lending, so it appears mr. xie’s assessment about the government’s action is correct, hopefully he is also right about it limiting the size of the bubble.

]]> By: outcast http://thisischinablog.com/2009/08/10/the-mother-of-all-bubbles/comment-page-1/#comment-488 outcast Mon, 10 Aug 2009 10:27:26 +0000 http://thisischinablog.com/?p=788#comment-488 Granted I'm not an economist, but while the short term (5 years out or so), long term still looks good. Why? Because there is a transformation towards more domestically driven growth, though this will take some time to be put into place. What is encouraging is to see so many new tech parks and R&D centers being setup, the jobs generated by filling up these areas are betting paying, and will be a huge help in this. The demographics crunch, in my opinion, for the nation is not really _that_ bad because it will allieviate China's constant employment problems, as well as other problems related to over population. Personally I look forward to the day the one child policy is no longer needed. However, a declining population does not necessisarily equate to a countries decline, South Korea has an aging population, but it still has energy left in it. Japan's decline is mostly because of economic, social, and political stagnation, their failure to let go of the confucian "we've been doing something a certain way for a long time so we're going to keep doing it, reality be damned" way of thinking has cost them dearly. As for when the urbanization will be complete, it will still take a long time. Even in 25 years the urbanization will only be ~70%. For comparison the United States in 1985 had an urbanization rate of ~75% (http://ww2.unhabitat.org/habrdd/conditions/northamerica/us2.gif), so the urban workforce will keep growing for many decades yet. Granted I’m not an economist, but while the short term (5 years out or so), long term still looks good. Why? Because there is a transformation towards more domestically driven growth, though this will take some time to be put into place. What is encouraging is to see so many new tech parks and R&D centers being setup, the jobs generated by filling up these areas are betting paying, and will be a huge help in this.

The demographics crunch, in my opinion, for the nation is not really _that_ bad because it will allieviate China’s constant employment problems, as well as other problems related to over population. Personally I look forward to the day the one child policy is no longer needed. However, a declining population does not necessisarily equate to a countries decline, South Korea has an aging population, but it still has energy left in it. Japan’s decline is mostly because of economic, social, and political stagnation, their failure to let go of the confucian “we’ve been doing something a certain way for a long time so we’re going to keep doing it, reality be damned” way of thinking has cost them dearly.

As for when the urbanization will be complete, it will still take a long time. Even in 25 years the urbanization will only be ~70%. For comparison the United States in 1985 had an urbanization rate of ~75% (http://ww2.unhabitat.org/habrdd/conditions/northamerica/us2.gif), so the urban workforce will keep growing for many decades yet.

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