China Economic Bubbles, Potential Fault Lines, and What it All Means

Monday, November 17, 2008 1:39
Posted in category The Big Picture
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With the last couple of weeks providing a seamless end to the bad economic news, and there seems to be an endless amount of “China” coverage… some of which, I have also written.

In wading through the pool, there is clearly a quality gap of analysis in some areas, there are clearly those who have their hand on the core issues and are providing excellent analysis (Michael Pettis), and then there are some who are trying to squeeze water out of a rock by using a single issue/ anecdote to draw broad brush conclusions.

Now, that being said, I myself have no idea how far this will go.  I have written out a few posts on things I can see happening, and I will continue to do so, but there are a few previous posts that I wrote last year that I thought I would like to bring out of the archives.

Not written about the effects of the credit crisis, early last year I wrote several pieces on China’s bubbles.  At that time, there was a lot of discussion about the pricing of assets, impact of implosions, and what the scariest cases were… so I tried to work through some of them.   The posts themselves are not technical, nor are they mean to highlight any particular policy that would be effective.  I was simply trying to pull out some of the areas I thought were most vulnerable, and what could happen should they (alone or in tandem) “pop”

The Great China Bubblebath: Part 1
The Great China Bubblebath: Part 2
The Great China Bubblebath: Part 3 – Scary Bubbles

Further to that, for those that are interested in getting a real handle on all the posible crack points, I highly suggest you download and spent the weekend with Fault Lines in China’s Economic Terrain (PDF Here)  It is perhaps the most comprehensive piece of writing I have seen on where China’s economic and social vulnerabilities lie, and for anyone writing analysis or making decisions about China… it is a must read.

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