http://www.youtube.com/watch?v=rPILhiTJ ... r_embedded

This can actually turn out good for the poor in China since sooner or later they will be occupied just maybe at a much lower price level. I would say that China's in trouble with all this spending including construction spending (like in video), events (olympics/expo...) infrastructure(roads,high speed trains,...) and general communist inefficiencies but seeing how the developed democratic world is also spending a lot of money many would say even more inefficiently/unwisely (Wars, entitlements...) it might all end up balancing out except for commodities/food being more expensive.

I don't think it will turn out so well. China has a history of overspending and nearly bankrupting its banks. It's happened roughly every 10 years, and usually something is done that puts off the problem to the future. Eventually, all the bad loans on the banks' balance sheets will come home to roost. When they do, China is likely to do what it has done in the past, either inflating its way out of it (this expropriating wealth) or nationalizing deposits (thus expropriating wealth).

I once thought it might be resolved partly through increased taxation, but now I don't think China has an adequate infrastructure to apply taxes with any semblance of fairness. The banks have been weakened by all this infrastructure spending, and many of the loans made to SOEs will never be paid off. China has few choices in this matter.

Many wonder why wealthy Chinese are always looking for a way out of China. In fact, most of them are not. As one put it, "yes, it's dirty, busy, noisy, crude . . . but it's my home and I feel alive in it". So why are they looking for residence in new countries? Simply put, they know China's history of expropriating wealth, and they want to get some of it out of China where, even though the income it produces will be taxed by a foreign government, it won't be completely expropriated by China.

^this... well wabbit you may come up with some childish insults but when making an observation in economics youre like a gdmn professor. i retract all my previous opinions of you for this was better said than anything i could've typed which usually are 'blah blah china stupid china suck blah blah me d1ck big.' oh yes, d7ck.

StarShapedHole wrote:^this... well wabbit you may come up with some childish insults

Oh yeah? Well, your mother wears army boots!