China's Economic Miracle Is Not So Miraculous Anymore

Source: Decline of the Empire

When Hopey-Changey attempts to re-brand himself as Teddy Roosevelt, it’s time to turn elsewhere for some Real News. Europe’s out. I don’t follow the European Debt Crisis day to day. I mean, what’s the point? And insofar as most everybody else seems to be obsessed with it, I’m not likely to tell you something about Europe you don’t already know. So for me, China is where the real action is.

Recent data indicates that the economic “miracle” in China is not so miraculous anymore. Economists predict heir phony economic growth rate of +9% over the last few years is slated to fall to a phony growth rate of +8% next year. China’s export outlook is said to be darkening, with their export market Europe on the ropes and consumption by all but the wealthy down in the United States. Business with other emerging markets is still booming, but those economies are still small compared with those of the developed nations of the OECD.

This week we learned that both China’s manufacturing and service sectors shrank in the same month for the first time since the dark days of 2009. And then there is their collapsing real estate bubble, which it is still taboo to talk about. We hear lots of talk from economists about a “soft landing” for China, which is code for we’re still in denial. If there’s going to be a soft landing, then why are Chinese officials working on perfecting their “social management” techniques? In fact, it’s their most pressing task.

One of China’s most senior officials has acknowledged that the souring global economy has the government on edge.

According to an official New China News Agency report Saturday, China’s top security chief warned provincial officials to brace for unrest if financial conditions continue to deteriorate. Zhou Yongkang, a member of China’s nine-person Politburo Standing Committee, said the country should focus on developing better “social management” — a euphemism for control aimed at stamping out opposition and demonstrations.

“Faced with the negative impact of the market economy, we still have not established a complete social management system,” Zhou said. “How to establish a social management with Chinese characteristics to suit the socialistic market economic system in China is the most pressing task we face today.”

Nothing is potentially more destabilizing to the government than a sustained financial crisis; the Communist Party has staked its credibility on delivering solid economic growth.

Chief among those threats is the slowing manufacturing sector. China has been hit recently by a spate of labor strikes sparked by complaints of shrinking paychecks and poor working conditions. More than 200 workers demonstrated at a Singaporean-owned electronics plant in Shanghai last week over rumors of a mass layoff.

Manufacturing activity contracted in November, the first time the sector has retreated in nearly three years, signaling that the worst is yet to come…

If you want your China news straight, no chaser, China Forbidden News is the way to go. We’ve got two videos. The first is about recent economic developments, including those mentioned above. The second is about their real estate bubble. These videos are narrated in Chinese, and they are packed with information. So it’s a tough slog for Western viewers, reading the subtitles, but it’s worth it if you want to know what’s happening in China.

A Few Related Posts

China’s Real Estate Bubble — Is The Collapse Here?
The Inevitable Rise Of China?
Is China’s Housing Bubble About To Burst? (older)

Read more at Decline of the Empire