china is going to be screwed, and i hope this leads to severe unrest. china can follow pakistan in the unraveling of its own internal empire.
as someone asked me, "is the financial crisis a subtle american attempt to screw china?" my answer "it wasn't intended that way, but that may be the very welcome consequence".
given fareed zakaria's track record, it is guaranteed that there will be an article in the next issue slamming india for 'upper-caste hindus' 'oppressing its minorities'. zakaria is typical of the upper-class mohammedans of india who *like* to keep the lower-class mohammedans poor, easily roused and available as storm troopers for violence, so that they, the upper-class, can extort more and more from the indian nation.
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Some of the fundamental premises of this article are unfounded. Notice how they "prescribe" social spending like health and unemployment insurance with the goal of making Chinese "save less and spend more". This is never going to happen - the Asian ethic will not let it be so.
And reality is that the Chinese stimulus - focussed on building more hard infrastructure is actually better. It allows them to channel their reserves into spending that is long term more productive. Hence China may not be as screwed as Newsweek would like.
Where China is screwed is in the following
1- State-led infrastructure spending will cause inefficiencies in the long run - the problem of Jawaharlal Stalin's "commanding heights". They will end up with highways / ports etc. that nobody uses
2- Inability to create domestic demand for current productive investment - try as they might Chinese people just do not want to buy lead-stuffed toys and melamine laced milk. The Chinese workers think it is all right for exporting - but they see this as frivolous consumption they will themselves not indulge in themselves. Hence banks may have to take a hit on current manufacturing investment. Most likely Chinese will get over this problem by dumping economic goods in India - watch out for Sitaram Treachery and friends calling for more trade with China
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