The China crisis : how China's economic collapse will lead to a global depression

306 Pages·2014·3.65 MB·English

by  James R Gorrie

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THE CHINA
CRISIS
HOW CHINA’S ECONOMIC COLLAPSE
WILL LEAD TO A
GLOBAL DEPRESSION
JAMES R. GORRIE
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Cover image: © Duncan Walker/iStockphoto
Cover design: Michael J. Freeland
Copyright © 2013 by James R. Gorrie. All rights reserved.
Published by John Wiley & Sons, Inc., Hoboken, New Jersey.
Published simultaneously in Canada.
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Library of Congress Cataloging-in-Publication Data:
Gorrie, James R.
The China crisis : how China’s economic collapse will lead to a global depression /
James R. Gorrie.
pages cm
Includes bibliographical references and index.
ISBN 978-1-118-47077-0 (cloth); ISBN 978-1-118-47080-0 (ePDF);
ISBN 978-1-118-47079-4 (Mobi); ISBN 978-1-118-47078-7 (ePub)
1. China—Economic conditions—2000- 2. China—Economic policy—2000-
3. Global Financial Crisis, 2008-2009. I. Title.
HC427.95.G67 2013
330.951—dc23
2012049233
Printed in the United States of America.
10 9 8 7 6 5 4 3 2 1
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I dedicate this book to my beautiful wife Lulu,
who supported and encouraged me throughout
the long writing process with a timely smile, loads of patience,
and the occasional yet indispensable glass of wine.
Her heartfelt faith in me is much appreciated.
I would also like to dedicate this book to my three boys,
Brandon, Oliver, and Alexander,
whose playful interruptions and numerous video game sessions
gave me much-needed breaks along the way.
Finally, I would like to dedicate this book to my parents,
Dr. Douglas and Marjorie Gorrie,
for their love and encouragement throughout my life.
James R. Gorrie
Austin, Texas
November 30, 2012
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“Men in the game are blind to what men looking on see clearly.”
–Chinese proverb
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Contents
Acknowledgments xi
Introduction 1
Chapter 1 A World on Edge 17
What Is the Proper Context in Which to
Assess China Today? 18
China’s Self-Infl icted Crises 23
Great Leap Forward or Famine? 24
Cultural Revolution or Social Cannibalism? 26
How Has Economic Integration with the Global
Economy Changed China? 30
Is China Becoming the Next Superpower? 31
Trading Partner to the World 32
The World’s Manufacturer 33
An Appetite for Commodities 34
Why Does China Have “Gold Fever?” 35
What Does the Rise of Other Nations, but Especially
of China, Mean for the Current Financial System? 37
Marketing the China Brand 38
vii
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viii CONTENTS
Does China Have a Bright and Powerful Future? 40
What’s Really behind the Great Wall? 41
Notes 44
Chapter 2 Stability and Legitimacy: A Chinese
Crisis from Within 47
What Kinds of Risks and Problems Are Typical
of Unstable Nations? 48
Stability and Instability: What Are They? 49
The Source of China’s “Stability” 51
What Are the Characteristics and Eff ects of Instability? 52
Does Stability also Mean “Legitimacy” in China? 54
Is Legitimacy of the Government Necessary
for Stability? 55
Does Communist China Have a History of Stability? 56
Does China’s Beijing Model Lead to Stability
and Legitimacy? 58
Notes 59
Chapter 3 The Rising Tide of Instability 61
Has China Been Infl uenced by Western Ideas? 64
Sources of Rising Instability in China 66
Notes 96
Chapter 4 Is China’s Economy Sustainable? 99
The Beijing Model: The Path Forward or
Cannibal Capitalism? 100
What Is the Beijing Model? 104
Is the Beijing Model Self-Sustaining? 105
Notes 141
Chapter 5: China’s Quiet Crisis: Financial and
Economic Meltdown 145
A Perception of Strength 146
China’s Quality of GDP 148
A Public and Private Stimulus Time Bomb 152
Development versus Economic Growth 155
How Much Was the Money Supply
Expanded in China? 156
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