From politics to the economy to the environment, the end may be near.
May 7, 2016
In July of 2001, Gordon Chang predicted an inevitable meltdown of the Chinese Communist Party in his best-selling book The Coming Collapse of China. Since then, China’s economy has increased by more than eightfold, to surpass even the United States on a purchasing parity power basis. Oops?
[copy]In Chang’s defense, he could not have anticipated the colossal blunder of President Bill Clinton and a Republican Congress in paving China’s ruthlessly mercantilist way into the World Trade Organization just five months after his book was published. That mother of all unfair trade deals—a well-deserved target of both the Sanders and Trump presidential campaigns—kept China’s Great Walls of Protectionism largely intact. However, it also opened U.S. markets to a flood of illegally subsidized Chinese imports, and catalyzed the offshoring of millions of American manufacturing jobs.
Since China’s entry into the WTO in 2001, the center of the world’s manufacturing base has seismically shifted as the People’s Republic of Unfair Trade Practices has used a dizzying array of illegal export subsidies, currency manipulation, intellectual-property theft, sweatshop labor and pollution havens to seize market share from both Europe and North America. To date, more than seventy thousand American factories have closed, over twenty million Americans have been put out of work and Chinese Communist Party leaders have laughed at Gordon Chang—all the way to their Swiss, Panamanian and Caymanian bank accounts.
China’s mercantilist WTO windfall notwithstanding, there are nonetheless growing signs that the collapse of China as Gordon Chang once predicted, and David Shambaugh is now intimating, may soon be at hand. As Exhibit A of the signs of China’s troubles I offer, in the remainder of this missive, an email correspondence directly from the Chinese mainland. It’s from an American citizen living and working with his Chinese wife and son in the PRC.
尽管中国入世捡了个大便宜，但是有越来越多的迹象显示中国就如同Gordon Chang曾预测的那样将会崩溃，David Shambaugh现在估计，可能崩溃会来的很快。作为我提供的中国正陷入困境的重要证据，在这篇文章中，一封直接来自于中国大陆的邮件。来自于一名美国公民，他目前与他的中国太太和孩子居住于中国。
From what I can see, and my Chinese wife can see, China will probably soon implode. Just what the catalyst will be is uncertain. Just before that time, or as a result of that implosion, the [Communist Party] will probably try to get the population to focus outside the country, probably through conflicts in the South China Sea or Taiwan.
For more than two decades, I have been telling people that the first thing China would do before trying to take Taiwan would be to take the Spratly Islands. If the world simply ignored that, then Taiwan would be next.
Hong Kong is a bitter, poison pill left by Britain for China. There will be no peaceful resolution of that problem.
The biggest problems in China right now are poisoned food, water, and air. Nobody trusts anybody, which is the reason why there is huge capital flight out of the country.
China has a national debt in excess of $28 trillion. But anybody knowing anything about Chinese accounting practices knows that number is probably just a very conservative number. Add some of the data and stuff Caixin [an online newspaper] is telling us about in terms of city and provincial accounting practices, and the numbers are horrible.
[copy]China wants its currency to become an international currency, but nobody knows its value. The only effective taxation going on here in China is [protectionist] for imports. The taxation system of businesses and income tax is completely broken and non-functional. There is no transparency in the financial system here. That is quite different from that of the Euro or the dollar. The fact is, the government is printing money like crazy here.
People are buying houses around here, but nobody is living in them. They don't trust potential renters. Homes are unaffordable for most people unless they use corruption to get the money needed. People have been investing in houses only because that is the only relatively secure form of asset management. Yet home purchases are at best leases since the government can come in at any time and requisition the land for other purposes.
Construction quality of housing here is horrible. If [province name withheld] had a big quake, the dead would be in the millions. China would almost immediately collapse.
The education system wherein I work is horrible. People in the West look at high math and science scores, but they don't realize that most of the students, like my son, cannot apply what they learn to similar math or science problems.
Students are completely unable and unwilling to ask questions. Professors and instructors don't have offices, let alone office hours, so questions on content the students don't understand are never answered. Of course, if a student fails a course, the teacher loses face, so every student passes.
If the university has a graduation rate at the end of four years of less than 97%, the university president loses face. Add on top of that the fact that around 2000, there were about 1 million college graduates. Compared to now, with over 7 million graduates, one has to ask: Where did they get all the qualified teachers?
My wife teaches in a public elementary school. The CPC is putting pressure on everybody to conform. Fun, considering the fact that the school would collapse overnight if its corruption were rooted out.
Real inflation in China is considerably higher than what the government figures reveal. For example, my wife reports that nearly all the food here in this Tier 2 city has doubled in price over the past three years.
While food prices typically go up about two weeks before Chinese New Year, they also normally go back down to pre-holiday prices. This year, food prices went up about 20% and have not gone back down.
My wife reports that middlemen in the food chain are mostly responsible for the food price increases. The farmers have not increased their prices because many prices are set by local government. However, because the middlemen have increased prices, demand for certain types of fresh foods has gone down. That means that while people in the cities are not buying because of increased food prices, the farmers have food rotting, unable to sell it.
I went to a farm not too long ago. What struck me was that in the apple orchards, as well as in the surrounding fields, even though the food was at that time being harvested, there were no bugs. I never saw that problem in the States, since there are mandated pesticide non-application times before harvest.
In most American markets, there will still be some food sold with insect marks on it. Most Americans don't realize what that really means. It means the pesticides are nearly, if not completely, gone from that food [because, unlike in China, they can’t be used during harvest time].
在大多数美国的市场上，还是有一些有虫蚀过的蔬果出售。多数美国人没有意识到这说明了什么。这说明该蔬果上基本，如果不是完全，已经没有农药了。[因为, 不像在中国, 在收获季节是不能喷洒农药的].
I have about 300 papers from my composition students about their lives to grade, many of which confirm some of the things I said above.
Have a great day.”
Have a great day indeed!
Jack a day ago
China's most serious problem is total absence of checks and balances, and accountability. It is like building the fastest bullet train without brakes. There is nothing more dangerous than absolute power and how much damages it inflicted on the respective nations and people that you see in Cuba (Fidel Castro), Burma (then under U Ne Win), North Korea, Iraq (then under Saddam Hussein) and not forgetting Germany's ill-beloved Hitler in different stages of History. The problems are copious that commentators can add to reply when there are no checks and balances.
Michael Nunez 2 days ago
Great Article , Cracks in the Great China Falsehood are becoming more apparent each passing Day . The Smoke and Mirror Show by the CCP is coming to it's Conclusion , Let's all hope the Good Chinese Do Not have to Suffer another " Great Leap Forward or go Through another Cultural Revolution " . The World has seen enough Slaughter in China Today ..... .
Bobserver 2 days ago
A couple of things. If Peter Navarro, a noted hawk on China, thinks the country is going to collapse then he should ease up on the China as threat hysteria.
Secondly, if his so-called friend is that pessimistic about China then why stay the last 20 years in China and why hasn't he and his family left the "sinking ship" yet?
Bankotsu 2 days ago
I'm tired of garbage lazy red necks bums like Navarro, people with no clue whatsoever about China, never step foot in China and shamelessly selling anti China propaganda for a living.
These are the good for nothings that I despise.
TDog 2 days ago
Pegging all of one's hopes on a single e-mail, eh?
I believe we have found yet another prime example of "grasping at straws."
Frankie 9.8349° N 118.7384° E > TDog 2 days ago
To be fair, Peter did qualify his missive by stating, "I will let you decide whether the views of this observer (name withheld to keep him out of a Chinese prison or shallow grave) is an accurate one or overly pessimistic." Doesn't sound like pegging one's hopes on a single e-mail to me. Acceptance simply depends on a particular reader's choice.
And by going to the e-mail itself, let me dwell on the more salient points which can be easily proven or disproved.
1. The biggest problems in China right now are poisoned food, water, and air. True or false?
2. China has a national debt in excess of $28 trillion. But anybody knowing anything about Chinese accounting practices knows that number is probably just a very conservative number. True or false? In fact, statistics show that borrowing this year will increase by 16% and 40% of the new loans will just be for paying the interest of outstanding debts.
3. China wants its currency to become an international currency, but nobody knows its value. True or false?
4. People are buying houses around here, but nobody is living in them.True or false?
5. The Education System. True or false?
I do not necessarily agree with all the contents of that e-mail but based on recent revelations, they do have merit. Maybe you should disprove the above as mere allegations and show us proof to clarify some things a bit?
David Kuo 2 days ago
If the article is true then why US is so nervous about the China's rising. Why those China's neighbors with territory disputes with China are so afraid of China and are looking for US to help. They can simply sit and see China to automatically explode by itself within a couple years. So , to me, the author is slapping his face by himself. Or the author just wanted to get catch people's eyes by writing this article in order to make some money to feed himself.
DrGod 13 hours ago
The 1820-1870 period America had import tariffs (mercantism), a manipulated currency (over pricing silver to gold vs Europe...culminating in Cross of Gold speech), slave labour (ends during this period), child labour, sweatshops (American garment district in NY was famous for this), genocide of the Native Americans, belligerent statements such as Manifest Destiny, 54 40 or fight and the Monroe Doctrine, a war with a neighbouring country and a civil war fought by an elected president who suspended habeas corpus, threw a state legislature in jail as well as imprisoned journalists. Followed by a long depression. And this period is book ended with wars against the United Kingdom and Spain.
I imagine the books of the well educated in Europe in the 1880's must have discussed the implosion of the American dream.
Tu Thuysanh a day ago
WELL HURRY UP AND IMPLODE PLEASE, THE SOONER CHINA IMPLODING INWARD, THE BETTER FOR THE REST OF THE WORLD TO GROW AND ENJOY.