Conn Hallinan - China’s Economy: The Frog and the Scorpion
April 11, 2012 Behind the political crisis that saw the recent fall of powerful Communist Party leader Bo Xiali is an internal battle over how to handle China’s slowing economy and growing income disparity, while shifting from a cheap labor export driven model to one built around internal consumption. Since China is the second largest economy on the planet—and likely to become the first in the next 20 to 30 years—getting it wrong could have serious consequences, from Beijing to Brasilia, and from Washington to Mumbai.
China’s current major economic challenges include a dangerous housing bubble, indebted local governments, and a widening wealth gap, problems replicated in most of the major economies in the world. Worldwide capitalism—despite China’s self-description as “socialism with Chinese characteristics”—is in the most severe crisis since the great crash of the 1930s.
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