China has built an economy that no nation can challenge. but is their new workshop of the world sustainable. Their manufacturing base dominates the world. Why make it yourself when China can do it cheaper and faster. Its the stadium hosting the global race to the bottom. And who cares if your national industries are destroyed building low-cost investor value instead of jobs?
The real price of this is only just being discovered. But If president Xi Jinping’s China crashes so does the global manufacturing base. No one else could step up – and cracks may be already appearing.
waking up from the dream
There is a danger to assume that because China is rich and able to build everything we need that its foundations are strong and as regulated as the West. It may present itself as a latter day Japan, but its a Communist state and subject to the same fundamental flaws – corruption, worker abuse and the drive to “win without fighting”, by placing its army of subversives into the corridors and seats of power with every country it does business with. In commerce, academia and terrifyingly, the government itself.
China’s unreal estate
You may have read about China’s property bubble. Corrupt companies are building vast cities of office blocks, infrastructure and consumer property and selling off-plan to hapless Chinese people who have invested their life savings in a bid to make a fortune for themselves. But the companies are using the mortgage money to build more before the last block is finished. And people have begun to wake up to what is just a giant Ponzi scheme and refusing to pay their mortgages.
This has seen protests and runs on local banks that had this been in the civilised, capitalist West, would have seen the State jump in to support it. Except this isn’t the West. Its a corrupt communist junta that is happy to break the lives of its citizens and let them starve having lost their life savings.
and if it all comes tumbling down – it falls on us
China may feel it doesn’t need to pay for any of this. But pay it will, by showing the West that its investment is worthless. The flow of western money is slowing, China’s own people are waking up from their dream of prosperity to discover it was all a nightmare of lies and financial deceit.
Can Xi Jinping survive – will China itself crack and fall apart?
Time to start making things again.