Rigid societies and economic systems appear to function quite well for along time. However, they are subject to large collapses. Another problem appears when small collapses are suppressed. This also leads to large collapses.
China’s apparently superior system is on the expressway to a supercritical meltdown. It can’t handle small collapses. It’s growth rate needs to be at least 8% per year to keep social unrest in check. This is not sustainable. China is going to crash hard.
I might add that many Western nations, including the U.S., are also on the expressway to a supercritical meltdown. Why?
The economic policies of many Western nations include suppressing recessions (small collapses). This suppression only leads to much bigger collapses.
Small collapses act to clear out inefficiencies, just like small brush fires clear out dead brush and dead trees. This is necessary to keep the system in order. Current U.S. policy is to do what it takes to eliminate the pain of recessions. This just puts us on the expressway to a big collapse.
In recent weeks, a speech on social unrest by a prominent Chinese scholar, Yu Jianrong, has been widely circulated on the internet in China. In it Mr Yu describes the emergence in recent years of a new type of social unrest, which he calls “venting incidents”: brief, unorganised outbursts of public rage against the authorities or the wealthy. China’s efforts to enforce “rigid stability”, he argues, were not sustainable and could result in “massive social catastrophe”. Even government officials, he notes, are giving warning in private of worse to come.