Will China's Economy Need a 911 EMT Soon?
An EMT (Emergency Medical Technician) recently told me a story of a man
he was called to attend who weighed over 500 lbs. Being a strapping
young man, the EMT and his partner (also a young male in reasonably good
shape) unwisely decided to forego a protocol to move the guy
with a mechanical gizmo designed for these fat sorts, resulting in both EMTs suffering painful back injuries. (Fortunately both recovered nicely after ingesting Advil for a few days.)
I bring this up because one of the ongoing debates - going on now since at least 2008, if not before - has been whether China's economy is headed for what is called a "hard landing" or a "soft landing." One thing that no one appears to assert is that China's economic growth will accelerate or even continue at the pace that marked its progress during most of the 21st century. Both sides of the debate acknowledge that China's once robust economy is laden with rolls of fat in the form of debt which will either slow it down (the soft landing) or perhaps cause a massive heart attack (the hard landing).
Now, as opposed to that fat man (who by the way was apologetic to the EMTs, recognizing how tough it was to deal with a 500+ lb. blob) China's Communist Party won't be calling for emergency relief anytime soon. To do so would appear to admit that their policy of promoting the current bubble might be responsible for the coming reversal of fortunes that China may face. And while the government has announced a list of "reforms" designed to reverse the trends of both unwieldy credit growth as well as political corruption that led to the Communist oligarchy reaping massive riches from the government's policies of the last 20 years, it may be that we're looking either at too little to late or - worse - a withering of the resolve to straighten things out that marked the current leadership's ascension to power a year ago. Either way, the soft landing crowd may be thinning out.
For a good analysis and discussion of all this, replete with charts galore if you like that sort of thing, check out John Mauldin's "Thoughts from the Frontline" this week.
Click HERE.
I bring this up because one of the ongoing debates - going on now since at least 2008, if not before - has been whether China's economy is headed for what is called a "hard landing" or a "soft landing." One thing that no one appears to assert is that China's economic growth will accelerate or even continue at the pace that marked its progress during most of the 21st century. Both sides of the debate acknowledge that China's once robust economy is laden with rolls of fat in the form of debt which will either slow it down (the soft landing) or perhaps cause a massive heart attack (the hard landing).
Now, as opposed to that fat man (who by the way was apologetic to the EMTs, recognizing how tough it was to deal with a 500+ lb. blob) China's Communist Party won't be calling for emergency relief anytime soon. To do so would appear to admit that their policy of promoting the current bubble might be responsible for the coming reversal of fortunes that China may face. And while the government has announced a list of "reforms" designed to reverse the trends of both unwieldy credit growth as well as political corruption that led to the Communist oligarchy reaping massive riches from the government's policies of the last 20 years, it may be that we're looking either at too little to late or - worse - a withering of the resolve to straighten things out that marked the current leadership's ascension to power a year ago. Either way, the soft landing crowd may be thinning out.
For a good analysis and discussion of all this, replete with charts galore if you like that sort of thing, check out John Mauldin's "Thoughts from the Frontline" this week.
Click HERE.
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