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"Having recently completed Rothbard’s 'America’s Great Depression', I couldn’t help draw the parallels between America’s roaring 20’s and China’s roaring economy today, and I couldn’t help conclude that China will inevitably fall in a depression just like America did during the 1930s. The objective of this article is to present an Austrian argument as to why this must happen; to substantiate my arguments, I will be quoting Rothbard’s Fifth Edition where relevant."
"In order to establish our parallel, we need some historical perspective of the relationship between a world superpower and a rising economic giant. In the 1920s, Great Britain was the superpower of the world, and the United States was the rising giant. As such, Great Britain ran its economic policies independently, and the U.S. adapted its own policies in a somewhat subordinated manner. Today, The United States is the hegemonic superpower of the world, and China is the rising economic giant. Not surprisingly, the U.S. runs its policy independently, while China adjusts its own accordingly."
"Finally, the bust may be triggered by a worldwide crisis in crude oil supplies. Peak oil supply is around the corner, if not already behind us, and Middle East or Caspian instability could sharply cut oil supplies. Historically, oil shortages and their concomitant rise of oil prices have always induced a recession. China’s growing dependence on oil ensures that should an oil crisis occur, it will slip into recession.
To summarize, the likely candidates for a trigger to the Chinese depression are (1) a worldwide currency, banking, or derivatives crisis, (2) a U.S. recession, (3) the containment of runaway inflation, (4) the disappearance of Chinese trade surpluses, and (5) an oil supply crisis.
Whatever the trigger of the bust in China, there is little doubt that this will provide the onset of a worldwide depression. Just like the U.S. emerged from the Great Depression as the unrivalled superpower of the world, so it is likely that China will emerge as the next."
www.financialsense.com/editor...02.html
See also:
divedi.blogspot.com/2005/04/...sion.html
"In order to establish our parallel, we need some historical perspective of the relationship between a world superpower and a rising economic giant. In the 1920s, Great Britain was the superpower of the world, and the United States was the rising giant. As such, Great Britain ran its economic policies independently, and the U.S. adapted its own policies in a somewhat subordinated manner. Today, The United States is the hegemonic superpower of the world, and China is the rising economic giant. Not surprisingly, the U.S. runs its policy independently, while China adjusts its own accordingly."
"Finally, the bust may be triggered by a worldwide crisis in crude oil supplies. Peak oil supply is around the corner, if not already behind us, and Middle East or Caspian instability could sharply cut oil supplies. Historically, oil shortages and their concomitant rise of oil prices have always induced a recession. China’s growing dependence on oil ensures that should an oil crisis occur, it will slip into recession.
To summarize, the likely candidates for a trigger to the Chinese depression are (1) a worldwide currency, banking, or derivatives crisis, (2) a U.S. recession, (3) the containment of runaway inflation, (4) the disappearance of Chinese trade surpluses, and (5) an oil supply crisis.
Whatever the trigger of the bust in China, there is little doubt that this will provide the onset of a worldwide depression. Just like the U.S. emerged from the Great Depression as the unrivalled superpower of the world, so it is likely that China will emerge as the next."
www.financialsense.com/editor...02.html
See also:
divedi.blogspot.com/2005/04/...sion.html
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Bulgaria
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Re: China's Great Depression
Tue, April 19, 2005 - 6:20 PMI would have to disagree that post-depression was the sole reason for the rise of the US to being a superpower, as in the 30's Britain was still there. But with the onset of WWII in 1939 with Britain, it had double the time of being beaten down, until 1945 being on the "front line". The US did not enter until 1942. So post war, Britain had much more to recover from, while the US mainland was untouched, and simply switched from war efforts, to cold-war efforts, brought about probably by the xenophobic behavior of the USSR, the other world superpower until the 80's.
As to whether history will repeat itself with China, I cannot say. To only have one previous example, and think it will be repeated identically is probably a little short-sighted. BUT... it maybe true. Time will tell.
I think Japan and North Korea should not be ignored as being world leaders.
Looking at the article quoted, and it's idea to compare history to today, I do not think the way Britain had its class system and treated subserviant countries it controlled was right. I don't think the way the US is behaving now is right either (not just bully-tactics foreign policies, but also in the carelessness of its citizens, especially the poor). Is China better? It does seem to be too much the other end of the spectrum, but I only have US based media to tell me, which is probably biased.
I did find the news article about China's response to a US accusation of a lack of human rights in their country, an interesting read. A real example of a pot calling the kettle black (or is it the plank in the eye scenario).
See www.commondreams.org/headlin...3-04.htm for the story (it's on other websites too).
What are your thoughts?
