Brahm

China: Recovery or Just Slightly Improved Data?

Trader Mark makes several ineresting points, and on quite a few provides interesting departures from the usual Wall Street hype and its peculiar tendency to misinterpret data. On China though Mark's observations are astute, though there may be departures on interpretation ofr China's mimicking the Greenspun era philosophy prevalent in the US.

Perhaps, the need for China to act the way Mark has outlined in loosening its fist and its monetary and fiscal policies is the the Communist Party's realization that a painful slowdown of the economy or collapse would trigger widespread revolt and disorder in China among the masses, which the Paqrty may not be able to face easily. At the other end, the Party and Government probably also realize that the spending spree from consumers in the US and Europe is perhaps over for a long time due to dubious retirement prospectss for the majority of Americans as a result of the recent economic tsunami in the West. So what better time to inflate the domestic Chinese economy, infrasatructure expansion, and consumption. Necessary for survival of the Party and the order in the face of constraints on China's exports for years to come. However, habits can't usually be given up easily, and Chinese masses, long trained to be thrifty, may not fully oblige immediaterly. So, my guess is China also will face lower growth prospects (in the 5 to 8% range) for quite awhile, and perhaps some unrest to boot from the working-class masses..