A Chinese financial and economic crisis is inevitable. So far, China has managed to skirt a catastrophe by the skin of its teeth. But China is a paper tiger that is starting to experience a wicked kind of economic entropy and broad-based, multi-sector contraction. VIVISXN’s economic team believes a crisis there is inescapable given the PRC’s zonked out growth model, global macro/geopolitical fretfulness and a dizzying debt load. Many of the world’s most eggheaded economists agree. A countdown to the meltdown has begun.
China has essentially hit a great brick wall — what development economists call the ‘middle income trap.’ This happens to developing economies when they have picked off all the low hanging cherries and exhausted all their cheapo factor endowments, as China has ravenously done for the past few decades. A new inflection point is well-nigh.
The transition to high-income status necessitates far more than repetitive, low-value assembly-style jobs staffed by country folk and clodhoppers moving to the cities. It requires the creation and adoption of high-value-added products and processes enabled by bleeding-edge technology, strategic thinking and a culture of true and tenacious innovation. read more ->