[PEN-L:9720] Re: Predicting the economic future of China

[Jim Devine <jdevine@xxxxxxxxxxxxxxx>]

So let me get this right. The World Bank is predicting that South Asia will
do better, due to supply-side improvements associated with "open[ing] to
the global economy." But this increased competition from South Asia will
make the bad situation in China worse, undermining the WB prediction that
China will attain its anti-poverty goals.

It sure looks like China has entered the road that Japan took 10 years or
so ago. It's not just a matter of consumers being "jaded": if prices fall,
then there's an incentive to delay purchases, which encourages further
deflation... What is the consumer debt situation there? the company debt
situation? if either are in big debt, deflation is a recipe for disaster.

Jim Devine jdevine@xxxxxxxxxxxxxxx &
http://clawww.lmu.edu/Faculty/JDevine/jdevine.html