Wednesday, September 8, 2010

Geopolitics - China

Geopolitics affect Macroeconomics - of course. Also, geopolitics is not often spoken about. I am currently reading 'The next 100 years' by George Friedman (Are there too many Friedman's out there?). Very intriguing read as it feeds you some information and tries to make you believe in what's written; however, information needs to be selectively accepted.

I came across this article on Bloomberg and got me thinking as it is related to the book. George very categorically states that Chinese growth cannot be sustained. It's something that a lot of people have been shouting out loud. China has supposedly averaged 10%+ over the last 30 years (this link is absolutely hilarious :D)

Japan drew a parallel between Japan of the 1980s and China of the 2010s - low cost indiscriminate loans with poor accountability amount to leverage for companies for which profits are not the primary motive. The motive lies with the banking system - that of funneling cash through the economy and growing at a tremendous pace.
Who is China exporting to even now and why is inflation so low?
Many have gone on to call China data manipulators (I am one of them - though not as credible a mouth).

One can only imagine how the China story will unravel. With the US on one side looking more on more like Japan of the early 1990s, what is China really planning. Let's also accept the fact that China has been trying to increase its might over its surrounding oceans.
In fact, oceans are one of the primary modes of military might according to George's book - something I have accepted. And I just came across a supposed 'wonder weapon' being developed (or already developed) by China. Hmmmm... Gold?

No comments:

Post a Comment