calling china collapsers: , page-14

haha right on cue:

Gordon Chang: The Coming Collapse of the Chinese Economy
http://www.kitco.com/ind/Chang/feb022012.html

He is the chorus leader, singing along all the years, "collapse China, collapse China..."

He listed some things, like this: "And the worst sign of all? In November and December, China’s foreign reserves decreased by $92.7 billion, the result of Chinese businesses and people smuggling money out of the country."

Isn't a more balanced trade a good thing? The 102 tons of gold imported in November contribute to the decline in FX reserve? 102 tons of gold at USD$1600 per ounce is worth $21 billion: 1 ton = 32150 oz -> 102 ton=3279300 oz, at $1600, market value is $5.26 billion, and this is for November. So Nov and Dec, can we say $10 billion drop in fx reserve was due to physical gold importing. Who know how much $$$ China spent buying up oil, coal, Austalian wine, LV bags, Ferraris etc? $92.7 billion decrease due to people smuggle? if this guy was not on dope then he is deliberately misleading his readers.

And then, talking about changing economic model to more domestic consumption, he declared: "...consumption’s role will not grow significantly until Beijing takes inherently risky steps to change the model.

No one in the Chinese capital, however, is willing to implement the decisions that are necessary to put the economy on a sustainable basis. Everyone knows what to do; they’re just not doing it..."

He will be proven wrong again in years to come.
Another peculiar feature of the Chinese economy is that up to 80% of consumer spending in China is transacted in cash. And whoever owns/runs the business will under report their business to reduce tax payment. The investment portion of the economy, a big majority of it are local government projects, and local government officials are incentivized to over report on these projects to show their performance to get promoted.

The Chinese economy does need change, reform, rationalise incentives etc, but the truth is that the Chinese economy is not as skewed toward investment as reported, and consumption actually plays a bigger role than is reported. Balanced economy? No. But so heavily skewed as reported that it will collapse any minute? No. The Chinese economy is a lot more resilient than many believe.

I will be returning every now and then on this topic. When facts prove me wrong, I will concede.

Gordon Chang is still going more than a decade after his first "China collapse in 5 years" prediction. My question to you is: how many decades do you need to prove yourself wrong?