What is Happening in China

The following is from the Washington's Blog site. I find the information here is generally right, but sometimes is spectacularly wrong. I have no way of independently assessing the following, but it sounds right to me:

Is the Chinese Economy Sputtering for the Same Reasons as the American Economy?

It was tempting to believe that China was different.

With its command and control economy with some of the trappings of free market capitalism, trillions in reserves, and abundant natural resources, many thought that China would "decouple" from the Western world's problems and sail into a prosperous future.

However, despite its long history, exotic names and seemingly strong position, China cannot avoid the rules of economics which have applied to all countries throughout history.

Corruption and Phony Bookkeeping

Corruption and the failure to follow the rule of law is one of the main factors which has dragged down the American economy.

The fact that - according to the Chinese central bank - Chinese officials stole $120 billion and fled the country does not auger well for China.

Scandals among various Chinese companies are not helping, either.

And then there are the made up statistics. As Warren Hatch of Catalpa Capital Advisors notes:

As Li Keqiang, the vice premier and heir-apparent to Wen Jiabao, laconically remarked to the US ambassador a few years ago, most of the statistics in China are “for reference only.”

And Charles Hugh Smith argues:

Despite their many differences, the economies of China and the U.S. share a number of key traits: both are corrupt, rigged, crony-Capitalist, rely on phony statistics and propaganda and operate with two sets of rules: one for the Elites, and another for the masses.

Despite their many differences, the economies of China and the U.S. share a number of key traits: both are corrupt, rigged, crony-Capitalist, rely on phony statistics and propaganda and operate with two sets of rules: one for the Elites, and another for the masses.

There is much more in the original post. Go read the whole article.

From my perspective, both countries suffer a large degree of corruption because they have an elite which has run amok.

How does this problem get fixed? It isn't clear to me. But it will require a wholesale revulsion by an overwhelming number of people, something like 80% will have to turn their back on the past and demand a new "social contract". Whether that is done through revolution, a new mass political party, a religious conversions, etc. I don't know. But it will take a social change of that order to sweep out the Augean stables of corruption and greed that now reign in both countries.