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De Omnibus Dubitandum - Lux Veritas

Monday, August 26, 2013

A Skyscraper Curse with Chinese Characteristics

Mises Daily:Monday, August 26, 2013 by Mark A. DeWeaver

The Mises Institute recently spoke with Mark A. DeWeaver about the Chinese economy, malinvestment, booms and busts, and his new book Animal Spirits with Chinese CharacteristicsMark DeWeaver, PhD, manages Quantrarian Asia Hedge. He lived and worked in China from 1985-1994, first as a student at Sun Yatsen University in Guangzhou, and later as a research analyst for Peregrine Brokerage (now part of BNP Paribas).
Mises Institute: There is a great deal of confusion concerning the Chinese economy and its trade and monetary policy and mystery concerning its ability to generate double-digit rates of economic growth. Let us start by giving us a description of the Chinese economy and whether it is socialism or capitalism at work.
DeWeaver: China has well-developed product markets but can hardly be called capitalist, given that most of the means of production are at least partially state owned.At the same time, the Chinese economy has also never really been centrally planned. Most economic decision making takes place at the local-government level, much as was the case during the Maoist period. The system might be best described by the seeming double oxymoron, capitalism with limited private ownership, socialism with limited planning….To Read More…..
My Take - Nothing is ever as it seems in China! Their growth numbers are not to be believed, they are building cities no one lives in to maintain employment, they are spending massive amounts on their military, the numbers from their banking system are made up, they are having demographic problems that is bound to cause serious problems in the future, the average citizen feels the communist government is illegitimate, the non-Han ethnics hate the government and the majority Han and corruption among the powerful elite is such that it may at some point collapse the government.  Nothing is ever as it seems in China!

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