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What's Gonna Happen To China's Economy? I Dunno.

By Dan Harris and Steve Dickinson

I am not a fan of economic predictions, mostly because they are virtually always slanted towards what is happening right now and also because they are wrong at least as often as they are right. I still find occasionally find them interesting and there is an interesting analysis of China's economy over at the 3q2u Blog, entitled, "What's happening in China's economy?" The post does a nice job analyzing what is driving China's economy right now and I agree with its emphasizing real estate over the stock markets. Many more of China's citizens own real estate than invest in stocks and if there is a plunge in China real estate values, it will have a major impact. In its post, "If The US Economy Goes Down, So Does China?s," China Vortex rightly described it as "a well-presented systematic presentation" and talks about how US problems will harm China. I agree with all that as I am of the view that there is no way China can escape the US/Europe slowdown unharmed, but I vehemently disagree with its conclusion that "we are in for a tough 20-30 years ahead." It is not clear to me who the "we" is, but I just do not see how anyone can predict out so far, particularly when economic cycles (please don't anyone ask me to define that term here) tend to last "only" 5-10 years. I tested out China Vortex's prediction on my iPhone, using the iChoose application. I asked it whether this downturn is going to last more than ten years and three times in a row, it answered me with a "no." What do you think? Do you go with my iPhone which says we will all be fine in less than ten years, China Vortex, which predicts we will all be miserable for the next thirty years, or me, who believes no predicting is possible?

Full post as published by China Law Blog on October 03, 2008 (boomark / email).