Monday, February 07, 2011

How many screaming Chinamen again?

In various times on Midrats when we discussed China, we have mentioned that behind the hype (some deserved) there is a very significant defect to the rise of China idea .... its economy.

Remember, Tunisia started due the
smashed great expectations of a young man. Never underestimate the power of someone promised so much, only to realize they will never get it in spite of all the hard work and doing everything that was asked of them.

Gordon G. Chang puts out some hard facts to ponder,
Almost nothing is of more interest to Chinese leaders than galloping inflation. It was inflation that got millions of students, workers and homemakers into the streets of Beijing and about 370 other cities across the country in 1989. Premier Wen, who went to Tiananmen Square before the troops to try to calm tensions, is now in charge of the economy and it is unlikely that he's forgotten what happens when technocrats mismanage growth.

Beijing said last year that inflation was 3.3%, but nobody believes that number is accurate. Francis Lun of Fulbright Securities, for instance, pegs it at 10%, and it may be even higher. When mainland residents cross in to Hong Kong to buy household items like shampoo, as they have been doing for recent months, we know that price increases in China have gotten out of hand.
Add that to a housing bubble that everyone is waiting to pop, and - well - interesting times.

NB: Before any of you get the PC-vapors and need you smelling salts about the title - shame on you. If you don't know all of

Stacy Keach

Powers Boothe's lines from Red Dawn by heart, shame on you!
Totally unrelated - I got this via the iPad paper Murdoch has put out - The Daily. For now it is free, I recommend you get it.

In it, I think we have one of the final nails in the dead tree paper as we know it.

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