Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

Being Misled about China (Part 1): Common Misconceptions

Illusion of Grandness

It could be easy to forgive the general public for being unaware that China's economy is unbalanced and unsustainable. Besides the stakeholders (media and the investment institutions) telling us positive hype, the Chinese central government and its leaders covet at every possible opportunity the chance to look unparalleled in the world. This is played out in events like Beijing Olympics, Shanghai Expo, and, Guangzhou Asian Games. The Chinese government showcases the very best that central planning can buy (no matter the cost). For the business visitor or the dignitary it is routine to have lavish banquets be bestowed on them at almost every opportune moment. However, what high-roll spending and over-the-top events do is to create a facade. Because behind the illusion of grandeur on display when either hosting world events or built to awe those coming on a quick stop-over business or holiday excursions to the major cities and package tourist destinations, is shrouded the rest of the nation and people being subjected to environmental degradation; ravaged of resources; and often ignored or neglected, at least until a major tragedy occurs (i.e., earthquake destruction of shoddy constructed schools in rural Sichuan). The current arrangement arguably necessitates maintaining a hierarchy class structure of rule where the state-directed media try to control the minds; the military force protects the most privileged; Hukou tries to keep the unwelcome out of sight and out of mind; and the jobs in factories and construction offer the underclass hope. It is system that has, with a certain acknowledgement, worked well for economic growth in the past 30 years, but it is not suitable for directing a large economy entering the next economic phase that needs to nurture independent business decision-making for selling to a middle class that needs to continue to grow.