Are we obsessing about its rise when we should be worried about its fall?
For the last 40 years, Americans have lagged in recognizing the declining fortunes of their foreign rivals. In the 1970s they thought the Soviet Union was 10 feet tall — ascendant even though corruption and inefficiency were destroying the vital organs of a decaying communist regime. In the late 1980s, they feared that Japan was going to economically overtake the United States, yet the crony capitalism, speculative madness, and political corruption evident throughout the 1980s led to the collapse of the Japanese economy in 1991.
Could the same malady have struck Americans when it comes to China? The latest news from Beijing is indicative of Chinese weakness: a persistent slowdown of economic growth, a glut of unsold goods, rising bad bank loans, a bursting real estate bubble, and a vicious power struggle at the top, coupled with unending political scandals. Many factors that have powered China’s rise, such as the demographic dividend, disregard for the environment, supercheap labor, and virtually unlimited access to external markets, are either receding or disappearing.
Everything You Think You Know About China Is Wrong – By Minxin Pei | Foreign Policy
The seeds of destruction are sown during the good times. Any society heavily focused on growth and stability will surely crash. Bad thinking, bad decisions and corruption will all grow exceedingly great during the good times in these societies. Then a crash will come.
You want a messy society with lots of small economic recessions to burn out the problems on a regular basis. Think of these small recessions as democratic elections. You want lots of elections to keep things on track. Suppressing elections will lead to revolutions – the big collapse. Suppressing recessions leads to – the big collapse.