Is China a 'paper dragon'?

November 11, 2009
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Utter the word “China” in Indiana, and as often as not resentment emerges over “jobs sent overseas.”

But is China really such a powerhouse? It certainly has absorbed a lot of manufacturing jobs, but some experts are beginning to think more skeptically.

Stephen Roach, who chairs Morgan Stanley Asia, has a book out saying China and the broader region won’t continue its torrid growth unless the nations learn to rely less on exports and prod their consumers to open their pocketbooks wider.

Other experts have cautioned that the Chinese have learned to manufacture but still haven’t gotten the hang of creating things, a key pillar for supporting strong, sustainable growth.

Yet another critic, billionaire Jim Chanos, is looking to make a fresh gob of money betting against China. The investment banker thinks the country is way overbuilt with malls and roads, and headed for its own version of a Great Recession. Read Politico’s story here.

If the naysayers are right, how do you think it would affect Indiana?

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  • Problems down the road for China
    From what I have read China in 30 to 40 years is going to a aging population, much like Japan, with no one to look after or replace them. Do to its One-Child-Per-Couple there has been at least three generations in China born under this policy. Right now the ancient social contract strains as there is no one to look after grandma and grandpa. And it will get worse. In Japan the hot thing is robotic health care workers since do to very low birth rates there will be no one to look after the present generation of workers. Japan and in the future China will be non issues, on the other hand India will be the nation to watch.

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