China, China, China


Seems like China has been in the news quite a bit lately. From the central bank raising rates, to a legendary stock shorter calling a bubble, to a Nobel laureate proclaiming China’s economy will grow to $123 trillion by 2040. Here is a collection of must read articles on China over the last few days.

China curbs more liquidity (ft/alphaville)

Jim Chanos : Contrarian Investor Predicts Crash in China (dealbook NYtimes)

$123,000,000,000,000* China’s estimated economy by the year 2040. Be warned.  (Foreign Policy)

NYTimes Thomas Friedman : Is China the Next Enron? (NY Times)

I find the $123 trillion arguement a littler bit hard to swallow.  Robert Fogel is a well respected economist, but I just see this call for China to grow for the next 30 years at roughly a 12% nominal GDP growth rate a little like the infamous DOW 36,000 call.   Let’s keep in mind that a good deal of China’s rapid growth is financed through a weak currency and a huge trade surplus.  That is not likely to continue for the next 30 years.


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