It was tempting to believe that China was different.
With its command and control economy with some of the trappings of free market capitalism, trillions in reserves, and abundant natural resources, many thought that China would “decouple” from the Western world’s problems and sail into a prosperous future.
However, despite its long history, exotic names and seemingly strong position, China cannot avoid the rules of economics which have applied to all countries throughout history.
Corruption and Phony Bookkeeping
Corruption and the failure to follow the rule of law is one of the main factors which has dragged down the American economy.
The fact that – according to the Chinese central bank – Chinese officials stole $120 billion and fled the country does not auger well for China.
Scandals among various Chinese companies are not helping, either.
And then there are the made up statistics. As Warren Hatch of Catalpa Capital Advisors notes:
As Li Keqiang, the vice premier and heir-apparent to Wen Jiabao, laconically remarked to the US ambassador a few years ago, most of the statistics in China are “for reference only.”FULL STORY