China update

An excellent op-ed on China by Jonah Goldberg at the Los Angeles Times:

Another reigning cliche is that the sun is setting on us as it did on the British Empire. But what does that mean? China isn't remotely powerful, influential or rich enough to play the leading role of America, and we aren't nearly so weak, ignorable or poor to deserve the supporting gig as 1950s Britain.

Besides, although China clearly wants its moment in the sun, it doesn't seem particularly eager or able to lead. "When was the last time Beijing offered its own peace plan for the Arab-Israeli conflict, for instance?" asks Jonathan Eyal, Europe correspondent for the Straits Times in Singapore.

"Other emerging powers are no better," he adds. "What is India's contribution to, say, solving the crisis in Sudan? Or Russia's plan for dealing with the North Korean nuclear problem?"

In other words, American leadership is still the global norm.

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Then there are China's very real problems. China has 700 billion very poor people. By 2050, it will have 400 million very old people. It will "get old before it gets rich," as conservative writer Mark Steyn likes to say. The country is shot through with corruption, bogus accounting practices that make subprime mortgage bundles look like gold bullion, and a political elite that remains terrified of democracy. A confident government doesn't banish its Nobel Peace Prize winners.

China Is Only Attacking The Symptoms And Will Overheat Until It Explodes

China's problem is rampant growth in money supply. Instead of curbing the problem, China prepares to address the symptoms, city by city it appears.

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China is overheating, it needs to slow the growth of credit. Instead, it is hell-bent on idiotic measures that cannot possibly work. So, China is going to overheat until it implodes.

In the meantime everyone is going gaga over China's growth and growth targets that are not possibly sustainable.

How do we know that? Easy, China's property bubble and inflation problem (massively understated at that), tells us all this "growth" is nothing but malinvestment, quite similar to the "growth" the US saw in its property bubble.

We know how that ended, and it will end the same way in China, Australia, Canada, the UK, and India as well.

Chinese Bank Lending Spree Continues; $75 Billion New Loans First Week in January Alone; Inflation Gone Amuck

Chinese banks continued their lending frenzy in the beginning of the year, doling out 500 billion yuan ($75.6 billion) in new loans in the first week of January alone, putting fresh pressure on the central bank to tighten policy to put a lid on inflation.

The loan figure includes about 210 billion yuan extended by the "Big Four" state lenders, sources with direct knowledge of the figures told Reuters on Wednesday.

The overall lending figure would roughly equal the new loans extended during all of December. New lending in December reached 480.7 billion yuan, meaning China overshot the government's target of keeping bank loans to 7.5 trillion yuan in 2010.

Banks lent 7.95 trillion yuan ($1.2 trillion) in 2010, overshooting Beijing's target and highlighting the need for more decisive policy tightening. In the past, China used loan quotas to keep a handle on lending. This year, the central bank has pledged to refine that system with regular calibrations of reserve requirements.

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