

Even China faces meltdown - tokenadult
http://www.atimes.com/atimes/Global_Economy/KH06Dj02.html

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tokenadult
"The most likely form of meltdown to occur is that of a banking system
collapse, as the gigantic volume of recent loans goes bad and liquidity in the
economy finally dries up. That would drain the huge Chinese savings pool and
cause steep output contraction, particularly in the overleveraged and
inefficient state-owned sector. The excess money in the system, with M2 money
supply up 28.5% in the year to June, also suggests that a price explosion
cannot be far away. Although official inflation is currently negative, the
People's Bank of China has already warned of a possible inflation resurgence.

"It must also be remembered that the social structure of China is now quite
Latin American in nature, with a Gini (inequality) coefficient rising rapidly,
already at 47 by 2007, well above its Asian neighbors and not far below Mexico
(48) and Argentina (49). Thus an economic collapse is unlikely to be survived
quietly, as was the case in South Korea and Thailand. "

The article has some interesting comparisons between China and other countries
in the region. It's examination of the example of Japan was interesting to me.

