Wednesday, March 4, 2015

Indigestion?

A number of authors have predicted trouble ahead for the economy of China. Don't take my word for it, Google "china economy in trouble" and get dozens of hits. Here is a recent example from The Telegraph (U.K.).

I've speculated China would hit the same "crony capitalism" wall Japan hit in the 1990s, with the same long-lasting negative results. There are reasons to believe this is possible, perhaps even probable.

Too-rapid growth can cause the economic equivalent of indigestion from overeating: the inability to assimilate too many inputs received too quickly. Don't be surprised if it happens again, this time in China.