While the Chinese stock market, as
measured by the China Securities Index 300, is
down 18% since October 16, that follows a period
of almost two years, since January 1, 2006, during
which the CSI 300 soared 535%. Chinese economic
growth is currently running at more than 11% and
the big money is convinced that it will continue.
At the same time, the country’s foreign exchange
reserves have grown to US$1.4 trillion, the
largest in the world.
A crash would appear
to be imminent!
societies with low
economic growth, very high inequality (as China
has now) and persistently high inflation; they are
collectively known as Latin America. Since China
also has much of the corruption that bedevils
Latin America and its government lacks any genuine
understanding of the free market and is
increasingly dominated by special interests, it
may indeed be fated to follow a Latin American
growth path for the next few decades, with a tiny
entrenched elite enriching itself at the expense
of the disfranchised
clipped from: www.atimes.com