New chinese MBT

[narwan]

PlasmaKrab said:
Remember the Thailand crash in 1997 and how some crazed NY traders ran down the Thai currency in some weeks, taking apart the whole Asian economy, like some later did to Argentina? Now THAT ended the Asian boom, for whoever would percieve that as a threat.

Oh, and quite every stock-based economy on the world right now is built on hot air. I won't extend on the dangers of stock-options, and how some more Enron-like affairs could turn it all to ashes precisely because of the US-Asian dependence.
Look how Boeing is trying to sue Airbus on EU-government loans? Where is the difference with China? The Chinese government is horribly corrupt, but the rising generation is bound to make it their own way at whichever cost.

The Asian bubble can plop anytime now, but itis too late for making profit whit it, since that would be at everyone's expense. So I guess everyone will go on filling it up with sheer faith, just like the dollar bubble or any other!

Saying that those traders caused the collapse of the asian economies is like saying that the assassination of archduke Ferdinand was the (sole) cause of the first world war. It was bound to happen and pretty soon too, it was unavoidable. Same thing with asian bubble in '97. Those traders didn't cause it, they flicked over a single domino stone and down came the whole house of cards. It was just as bound to happen.

Stock bound economies aren't necessairily build on hot air either, it's build on 'expectation'. Those expectations can be manipulated and it is that amount of manipulation that determines the amount of 'hot air' (Enron indeed). The chinese are doing just that on a scale larger probably than what caused the end of the japanese boom of the 80's (bank defaults and bad loans/investments mostly).

The chinese will slowly improve their lot, but don't forget that most of them are living in abject poverty, that the country lacks most of the needed (industrial and economic) infrastructure to improve the situation in China as a whole.
At best they can hope for gradual and substantial improvements in some regions, provided they can 'isolate' them from the rest to prevent their poverty from dragging down the succesful regions with them (as they say, China didn't take over Hongkong, Hongkong took over China! ).
But it's unlikely that the masses that will be left behind will take kindly to it. Which is the real problem of the chinese government; they can't improve the whole of the country at the same time, but how to manage localised growth and improvements without triggering revoltes (both by the masses and by the local fiefs running their regions like the warlords of the old days)?

Edit: wrote the reply before I saw yours Kevin; I think the chinese are trying to work around the bubble by joining with others economies (the US especially) as close as possible under the assumption that 1) it will be in the US' economic interest (short term at least) to keep China's bubble alive and 2) the view economic power as a relative; if you can take down the adversary with you you may even end up on top!