CitizenPete uschina01
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When was the last time you stood in line trying to purchase something at an outlet Mall in Beijing? You'll wait for half an hour for the privilege of buying a $600 purse for your wife. From my experience the Chinese are purchasing plenty of their own goods, yet they still enjoy growing exports to the world, only it's no longer "cheap" chinese goods -- it's "inexpensive" Chinese goods, because (even as a Comi country) they don't control the wage rates and businesses like the US does. Beijing might start putting their hand on your wallet for more fees, but face it, the US government has their hands up our ass. Enforcement of environmental laws, intellectual property rights, and safety regulations in China still appears virtually non-existent.
Is the Chinese economy red hot? Yes, I think so.
Is there inflation? Maybe more then anyone admits or understands, however much is tied to explosive growth and demand, while US inflation appears to be tied mostly to FED debasement of the currency to fend off deflation and maintain reserves.
Will the Chinese economy implode? -- probably, but not yet. (Mises:"beware the boom") . I beleive the run has a more to go and to think a train crash will act as some sort of wake up call to reflect on the speed of growth is a childish fairy tale at best.
How many 1.2 million dollar apartments can Beijing possibly have? Many more, apartments are still hard to find. The cost of food (on the street market) has gone up at least 40% in the last year, but you can still eat for about a couple dollars a day. Wage inflation commeth, but most will be passed to the working US Bubba at Walmart along with more US import costs. Suck it up Union *****es.
Chinese consumers are buying 1.5 million automobiles every month (most for cash -not credit) and just when Reuters reports slowing sales in March, in April they climb over 5% again. China has a long way to go. IMO it's a third world nation of Millionares driving Audi A8's and Porsche Cayans, living in 2 million dollar apartments, yet some of the former "villagers" still squat and crap in the park.
If the US stops buying Chinese products (or if the supply is cut off), then the US stops buying any products (or they pay more from elsewhere). The US does not and can not manufacture what they consume and need to sustain the countries infustructure. China can and does comsume what they produce. I have walked the material markets in Beijing for glass, stone, metals, SS, electric, etc... that go on for acres (as far as the eye can see. I have never seen anything like it in the US anywhere. From my view the US needs China more than they need our debt.
http://www.uschina.org/statistics/tradetable.html
http://www.chinacartimes.com/2011/04/11/china-car-sales-up-5-4-in-march/
Will local Chinese municipalites over extend themselves and default on loans? Maybe some, but right now Beijing can bail out the local governments without printing any fiat money. What is New Jersey, Illinois, California, etc... going to do? I'll tell you - their going to start selling off the assets to countries like China and soon your downtown parking fee will also go to Beijing.
One thing I know for certain: It's alot easier to start and operate a business in China right now than under the thumb of the US goverment buracracy. In many ways China appears more Libertarian and Capitalistic in practice than the US was in the 1950s. The US government now assures that you can't be profitable unless you get subsidies paid for by taxpayers and loans from the FED. Hear that sucking sound? It's the combination of US government vacumming out your life savings while they blow Beijing.
Three weeks ago a Jeep I was testing a product on in Beijing blew a radiator. We had it replaced at a Jeep street shop at 11:ooPM in half an hour and they gave us cold beers while we waited for 4 guys to replace it. Cost was about 40$, labor included. The following week we had the fuel tank R&R'd (for test reasons), under 50 bucks. etc... Imagine this happening in the USSA ?
Chinese exceptionalism? They appear exceptional in many cases, but it will not go on for ever. The guys living on the floor in the office of the Jeep garage will eventually be getting tired of scratching the bug bites on their legs.