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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  1. How can any company that has the cash and other assets be allowed to simply foreclose and not pay the debt? Simon, pay the debt and sell the property yourself. Don't just stiff the bank with the loan and require them to find a buyer.

  2. If you only knew....

  3. The proposal is structured in such a way that a private company (who has competitors in the marketplace) has struck a deal to get "financing" through utility ratepayers via IPL. Competitors to BlueIndy are at disadvantage now. The story isn't "how green can we be" but how creative "financing" through captive ratepayers benefits a company whose proposal should sink or float in the competitive marketplace without customer funding. If it was a great idea there would be financing available. IBJ needs to be doing a story on the utility ratemaking piece of this (which is pretty complicated) but instead it suggests that folks are whining about paying for being green.

  4. The facts contained in your post make your position so much more credible than those based on sheer emotion. Thanks for enlightening us.

  5. Please consider a couple of economic realities: First, retail is more consolidated now than it was when malls like this were built. There used to be many department stores. Now, in essence, there is one--Macy's. Right off, you've eliminated the need for multiple anchor stores in malls. And in-line retailers have consolidated or folded or have stopped building new stores because so much of their business is now online. The Limited, for example, Next, malls are closing all over the country, even some of the former gems are now derelict.Times change. And finally, as the income level of any particular area declines, so do the retail offerings. Sad, but true.

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