China syndrome
June 19th 2010 06:29
The Oz economy, and therefore Oz politics, has become greatly distorted by the mining boom which is in turn based on demand by China. Various commentators have claimed that Chinese demand, and therefore the boom, will continue for decades, but there are good reasons to question this.
First, growth in China's exports is dependent on demand from Europe and the US, and if these economies tank thanks to the latest wave of the GFC then trouble for China will follow.
Second, China has enormous health and sustainability problems. Huge numbers of Chinese suffer from illness or injuries caused by pollution or unsafe industries and there is no social welfare system to support them. In addition, China's water supplies are running out, and there is no easy solution to that.
Third, there are rumblings that China's finance system is not as robust as some choose to believe so a domestic growth strategy will be hard to achieve.
Dissent is growing in China, and in particular sustained unemployment is cutting into social stability.
Furthermore, China does not have a mechanism for dealing with dissent other than force, and so if the protests become so great they can't be dealt with by force it could mean political meltdown.
And then the iron ore contracts and possibly the gas contracts will be worthless, and Oz will have a serious economic and political problem
First, growth in China's exports is dependent on demand from Europe and the US, and if these economies tank thanks to the latest wave of the GFC then trouble for China will follow.
Second, China has enormous health and sustainability problems. Huge numbers of Chinese suffer from illness or injuries caused by pollution or unsafe industries and there is no social welfare system to support them. In addition, China's water supplies are running out, and there is no easy solution to that.
Dissent is growing in China, and in particular sustained unemployment is cutting into social stability.
Furthermore, China does not have a mechanism for dealing with dissent other than force, and so if the protests become so great they can't be dealt with by force it could mean political meltdown.
And then the iron ore contracts and possibly the gas contracts will be worthless, and Oz will have a serious economic and political problem
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