Posted by qqq3 > 2019-07-10 15:06 | Report Abuse

Gordan Chang? People has been saying doomsday for China for 20 years...................

me? I think China still got many legs .....

Posted by Junichiro > 2019-07-11 16:30 | Report Abuse

The west look at everything from their perspective n assume it to be the ultimate truth. They call it 'conventional wisdom'. But in reality, how far is this true.

When Japan was in a recession after the Plaza Accord, Nobel Laureate Paul Krugman insists that when interest rates fall to zero, Japan's economic fortunes will revive. In short, he says monetary policy always work. But, sadly, maybe it works in US but not in Japan.

He missed out an important element - culture. It may well be true of US when everybody will jump into the wagon when interest rates fall to zero -in line with Adam Smith's invisible hand. But, Japaneses keep on repaying their debts without borrowing in spite of interest rates falling to zero. That is their culture - responsibility. And Krugman's suggestion does not work.

In the end, Krugman suggest Japan central bank buys helicopters, refrigerators etc to end the deflation. But this is the realm of fiscal policy not monetary policy. In short, Krugman admitted monetary policy did not work in japan.

As to PRC, I have read comments that they will experience capital flight. The beauty of PRC's economy is only part of the Yuan that is used for international trade in convertible. The rest is not convertible. So, capital flight is not a problem and that is why Gordon Chang's prediction does not come true.