The always lively AsiaPundit Blog just weighed in on the China boom or bust controversy we started the other day, here and here. In a post, entitled, “China’s Boom/China’s Bust,” [link no longer exists] AsiaPundit comes down on the side of the bears, but just barely (pun intended):
AsiaPundit admits to being a bit of a bear on China. It’s not that China’s economic growth is a myth. The ‘miracle’ is very measurable. However, anything that can be measured cannot be called a miracle.
There will be a crisis, it could be sparked by bad policies at home or abroad. A collapse of US housing markets, for instance, could easily plunge the Middle Kingdom into despair. When the crisis happens, the interesting thing will be how it plays out socially and politically.
The US tends to solve its problems quickly and has the political flexibility to dismiss bad administrations by ballot. Japan’s biggest crisis sparked a decade of deflation. After the Asian crisis Indonesia emerged a democracy, the Philippines never really found its feet, while South Korea made a wonderful transformation.
Predicting when a crisis will occur is a crap shoot, although there are indicators that can provide warning signs. Guessing what happens after a crisis hits is next to impossible.
China Law Blog earlier this week posted a response challenging Minxin Pei’s doom-and-gloom article on China’s problems. Today Dan Harris, the blog’s author, notes that Tom Barnett and James Na have replied:
I blogged a few days ago about a recent article by Minxin Pei predicting China’s inevitable fall. At that time I talked about the article having generated “quite a bit of buzz in the blogosphere.” The buzz is even louder now.
I posted Dr. Pei’s article because I found it thought provoking, but I did not sign on to its pessimistic conclusion. I suggested that those interested in these sorts of “big idea think pieces” on China should read “big idea” bloggers like James Na, Dan Drezner and Tom Barnett, whose views range all over the China optimist-pessimist map.
Barnett and Na took me up on my suggestion and ran posts on the Pei piece. Na liked Pei’s thesis. Barnett did not.
At some point, China will face both small and large economic crisis. My disagreement is with those who seem to delight in predicting China’s economic doom based more on China’s politics than on its present economic realities.