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Below is an excerpt of an article about China’s recent failures as a nation, which to me represents the beginning of the fall of this “great” nation.
“China’s economic growing pains”
By The Week’s Editorial Staff, from The Week, February 10, 2012
The world’s most populous nation is finding that its economic prosperity comes with a price: Inequality, social division, and political unrest
What’s wrong with China?
It’s struggling to cope with the consequences of its own rapid economic growth. China’s economy grew at a red-hot rate of 10 percent a year for the last decade, making the country as a whole much more affluent. But the growth has been very unevenly spread over the vast population of 1.3 billion, causing bitterness and discord. The economic boom has created a new and very visible wealthy class of top government officials and private-business owners, including more than 500,000 millionaires who travel abroad, drive Mercedes-Benzes and Rolls-Royces, and adorn their wrists with Rolexes. But on average the Chinese are only about as wealthy as Jamaicans or Albanians. As a result, China is now suffering from serious social, economic, and political problems that have left its population restless and its leadership worried.
Will the economic growth continue?
It’s already slowing, dipping below 9 percent in one quarter last year. That partly reflects the Chinese economy’s heavy reliance on exports, which have dropped off since recession-stung Europeans and Americans pulled back on purchases of consumer goods. China’s rising wages, ironically, are also a factor: Some industries, particularly clothing and footwear, are moving factories from China to Indonesia and Bangladesh, where they can still pay workers pennies a day. But the biggest threats to China’s economy are inflation and a housing bubble. The newly rich poured their earnings into real estate, driving prices way up. Many also invested in the private, underground lending industry, which thrives because official Chinese banks often refuse to make private loans. In at least one city, Wenzhou, a wave of defaults of these underground bank loans has set off a rash of suicides among people who can’t pay their debts.
Posted by Will Skelton