China, really, who knows? There are two points of view. At the risk of over-simplification, they are:
SINOPHILE: China is a huge resource of both labor and consumers. The country's in a great growth spurt for modernization and productivity improvements. The government seems to manage everything just right to maintain excellent economic growth year after year. China didn't even pause for the Credit Crisis.
SINOPHOBE: The ideas don't fly and the numbers don't add. With no respect for intellectual property and a long trail of economic data reminiscent of Bernie Madoff's investment returns, the China story can only have an ugly ending. Communism cannot beget the free flow of innovation, capital, risk, and prosperity.
With the recent news that the Chinese government has permitted the debt default of Chaori Solar, both the PHILEs and the PHOBEs have another data point. The former will appreciate the increasing Westernization of the Chinese corporate market. The latter will believe the dam is about to break to reveal to the world a deluge of negative financial tidings.
It's rhetorically convenient in an article of this type to stake out a position somewhere in the middle. But no! That's not how FinancialPests operate! We've planted our flag in one of these camps. Let us conclude with this quote from the GARP News article:
"[T]he ruling Communist Party has pledged to make the economy more productive by allowing market forces a bigger role."
Whether it's ideas that don't add, numbers that don't fly, or historians who don't believe what they're reading, something's not right here. In agreement with Shakespeare, we say time will tell. Give it ten years - to 2024, say. The current "China Model" will prove itself false.
No comments:
Post a Comment